What is your current opinion of the SoftBank Group

($9984 (+2,12 %) )? I would like to give you a few arguments that currently speak in favor of the SoftBank Group and would then like to hear your opinion!

1) The telecommunications business is very stable and profitable, which creates stability. Research is being conducted on 6G technology and potential market launch.

2) The SoftBank Group owns about 90% of the British chip designer ARM ($ARM (+0,8 %) ), but its own market capitalization is only 60% of the ARM shares held (in addition to all other assets).

3) The so-called Vision Fund (VF) was after the collapse of the technology sector in 2022 was not very successful and caused the company losses in the billions. For this reason, a reorientation is taking place and less emphasis is being placed on start-up financing (VC) and parts of VF are now being sold. The focus is now almost entirely on AI and chips which are now being invested in aggressively.

4) The biggest trump card here is the chip company ARMaround which the new strategy will revolve. This year there have been several announcements in connection with ARM. By the spring 2025 ARM is to develop the prototype of an AI chip which will be available from fall of the same year. SoftBank is reportedly in talks with TSMC ($2330 ), which is to produce the specially developed chips. It is widely assumed that the AI chip will be developed by ARM, but that the business will later be spun off and placed under the SoftBank Group.

5) Another vision is the creation of an NVIDIA competitor. There is a new project called "Izanagi" (Japanese God of Creation), a 100 billion dollar start-up for AI chips, all based on ARM chip technology. SoftBank is to invest 30 billion itself and 70 billion from investors, most likely from the Middle East (customer neutrality has always been one of their strengths). NVIDIA, Apple, Amazon, Microsoft, AMD, Google, Samsung (etc.) are all customers of ARM and use their technology (they buy licenses), especially with regard to AI/data centers and ARM's monopoly area of cell phones. SoftBank is now trying to take advantage of this untapped potential of its own technology and instead of just licensing it, take full advantage of it itself. This is also supported by new acquisitions; at the moment, for example, they are trying to acquire the British AI chip start-up Graphcore (often referred to as NVIDIA's European competitor) from England which has recently been in financial difficulties and is therefore an attractive takeover target. It would be perfectly suited to synergies with ARM, which is also based in the UK, and which it may then be placed under.

6) Regardless of this grand vision, there are also many smaller AI projects. For example, they support and invest in the AI search engine Perplexity AIwhich is intended to compete with Google. They are also involved in the start-up Tempus AI with which they have now established a joint venture which will improve the healthcare system into the future with AI data analysis. Another neat AI project is an AI that makes sure that angry customers on the phone are treated with care. customer service sound completely normal, so that they are exposed to less psychological stress. Also recently, a collaboration with Deutsche Telekom and other partners to create an AI specifically for the telecommunications sector. Investments are also to be made in renewable energies to cover the future power requirements of AI data centers. (Etc. Etc. Etc.)

7) Another interesting investment is in the newly founded joint venture Rapidusin which SoftBank and other large Japanese companies (Sony, NTT.....), with the support of the government and IBMhave joined forces to develop state-of-the-art 2nm chips in Japan in the near future. This is an interesting investment, especially in connection with the ambition to produce its own AI chips.

8) Last but not least, it does not hurt to note that the SoftBank Group is heavily invested in India to position itself in the technology sector in this significantly growing economy. In China, they have recently scaled back their investment activities somewhat, for example by selling the majority of their Alibaba shares.

Minus point: Very high debt of ¥15.39 trillion (approx. €90 billion), which is offset by assets worth around €300 billion and in Japan there is also no interest on this debt, or at least microscopically low interest.

ConclusionAs a conglomerate with an incredible number of holdings, it is not easy to understand the structures of the SoftBank Group. Nevertheless, they are not exactly stuck in the past, but are fully embracing the AI age and have set themselves the goal of being at the forefront.

With projects such as "Izanagi", they have big plans that now need to be realized. But with the chip specialist ARM under their control, plenty of cash, contacts in the industry and a good connection to financial backers in the Middle East, the project doesn't seem so unrealistic.

Other activities in the field of chips and AI, such as the Rapidus joint venture, ARM's new AI chip, projects with Tempus AI, Perplexity AI and Deutsche Telekom, are already in the process of being realized.

All in all, there are great opportunities here in the medium to long term, although there is of course a certain residual risk, but I remain positive that they will succeed, and if they do, then they will succeed.