Masayoshi Son, the head of SoftBank Group, has ascended to the title of the wealthiest individual in Asia, thanks to the current surge in artificial intelligence (AI) technologies. This market enthusiasm has seen the shares of the Tokyo-based investment powerhouse reach unprecedented heights, positioning it as Japan's most valuable entity by market capitalization, surpassing automotive giant Toyota Motor.
At 68 years old, Son's wealth is estimated by Forbes to be around $97 billion, primarily stemming from his holdings in SoftBank. This leap in fortune has enabled him to outpace Mukesh Ambani, chairman of Reliance Industries, who holds a net worth of approximately $90 billion, as detailed in Forbes’ Real-Time Billionaires List.
SoftBank's market valuation has soared to $298 billion, with its share price climbing over 80% in just this year, fueled by the buzz surrounding Son's investments in AI. In a recent CNBC interview, he likened the current AI revolution to the dot-com boom, asserting it could represent opportunities up to 50 times greater than those seen in that era.
On the previous day, Son made headlines with a commitment to invest up to €75 billion (about $87 billion) in AI infrastructure projects, including data centers across France. As demand for AI solutions is projected to escalate, SoftBank's portfolio companies have also seen substantial growth, further bolstering the value of the parent company. A pivotal element in this surge is Arm Holdings, a Nasdaq-listed semiconductor company in which SoftBank holds a nearly 90% interest, according to Dan Baker, a senior equity analyst at Morningstar.
Arm Holdings has witnessed its shares surge over 250% this year and recently hinted that it could meet its $15 billion chip sales target earlier than anticipated. Back in March, the company unveiled its first chip developed in-house, shifting its focus from merely licensing technologies. It forecasted that it would reach $15 billion in self-manufactured chip sales within five years, predicting annual revenues would skyrocket to $25 billion by then, representing a more than six-fold increase since 2025.
Meanwhile, investors are optimistic about OpenAI, the creator of ChatGPT, in which SoftBank has already invested over $30 billion. Under billionaire Sam Altman's leadership, OpenAI was valued at $852 billion in March after securing $122 billion from investors, including giants like Amazon and Nvidia.
The competition is heating up between OpenAI and its rapidly growing rival, Anthropic, both racing towards a public offering to draw in additional investments. SoftBank's pledge of at least another $20 billion in OpenAI by October could yield significant rewards if the firm's valuation climbs further. Speculations suggest that OpenAI could achieve a valuation nearing $1 trillion at its public debut, especially with the excitement surrounding upcoming mega-offerings, such as Elon Musk's SpaceX, which aims to raise $75 billion, according to Hironori Akizawa, a senior fund manager at Tokio Marine Asset Management based in Tokyo.
Despite his strong focus on AI, Son has maintained a commitment to financial prudence. SoftBank’s leverage ratio, measured by loans to assets, has dropped to 17% from 18% in the last fiscal quarter, based on a May report from Morningstar. The company enforces a self-imposed leverage cap of 25% after previous high borrowing resulted in significant market apprehensions.
However, Deutsche Bank analyst Peter Milliken issued a note of caution, indicating that challenges lie ahead. OpenAI must contend with fierce competition from Anthropic, which recently outstripped OpenAI with a valuation of $965 billion following a funding round in May. Additionally, the rise of cheaper, open-source AI models could potentially impact OpenAI’s sales growth.
Milliken noted, “SoftBank has experienced a remarkable journey, largely driven by astute investments and a bull market showing hints of entering a mania. It seems that analysts and investors are increasingly fixated on short-term gains rather than assessing long-term prospects with detailed predictions.”
