SoftBank Group Corp. (9984) Earnings Call Transcript & Summary

As it is now the scheduled time, may I ask Mr. Son to take the chair.

Good morning. I am Masayoshi Son, Chairman and CEO of SoftBank Group Corp. AGM is once a year where I have an opportunity to see you in person and communicate with you what my passion is about. And I am looking forward to this opportunity every year. Today, we want to talk about the journey of the SoftBank in the past and how we are going to navigate ourselves in the next 10 years and ahead. And I look forward to sharing our views with you later. Thank you once again very much for taking time from your busy schedules to attend today. I will chair this meeting pursuant to the provision of Article 13 of the Articles of Incorporation. I hereby call the 45th Annual General Meeting of Shareholders to order. This meeting utilizes an online attendance system, allowing shareholders to vote and ask questions via the Internet. The agenda today is just as stated in the communication notice posted on our website. I would also like to report that the meeting has a quorum. Now the moderator will explain the proceedings of the meeting.

Thank you. We will start with matters for reporting, then explain the matters for approval, then we will discuss the business strategy. Following that, we will proceed to a Q&A session on all matters for reporting and matters for approval. After the Q&A session, we will take vote on the matters for approval only. For exercising voting rights, shareholders on site will be asked to confirm by clapping and shareholders online are asked to exercise their voting rights through the Internet. Please note that online voting is already available, but once the vote is cast, it cannot be modified. After explaining the matters for approval and the business strategy, we will first answer the questions submitted in advance. Then shareholders on site will be invited to ask questions. [Operator Instructions] Also, questions from shareholders on site will only be accepted until the start of the Q&A from online shareholders. Then we will address any questions submitted online only today. This website is already open for posting questions and comments for shareholders and will close 5 minutes after the start of the Q&A session. [Operator Instructions] Please be advised that any motions from online shareholders, including those related to the meeting procedures or matters for approval will not be accepted as previously notified. In case any shareholders on site submit a motion to amend the resolutions, these will be deliberated together with the original proposals and we will vote on the original proposals first.

Thank you for your attention. Now I'd like to call for vote to confirm if this procedure is acceptable. Online participants, please press clapping button, if you agree. Those attending in person, please clap your hands. [Voting]

Thank you very much. Let us now confirm the voting results. Please wait a moment. With the majority of shareholders agreed, we shall proceed with this procedure. The matters we are reporting are as shown on the screen. I'd like to present your summary video to explain our business overview. About 10-minute-long video. Please watch. [Presentation]

That concludes a video presentation. Let me now present the matters for approval. Details are set out in the convocation notice on our website. Proposal 1, appropriation of surplus. Proposal 2, election of 9 directors. Proposal 3, election of 3 Audit and Supervisory Board members. Proposal 4, revision of remuneration in the form of stock options for directors. Now I would like to present our business strategy. So first of all, I want to share this picture with you. Previously, I may touch on this photo several times so some of the shareholders already know about this, but I would like to talk about this once again with this opportunity. To discuss our 10-year future vision, I think that it is good idea to come back to this photo once again. When I was 17 years old, this was a mysterious photo that I saw the first time in my life. Looks like future city blueprint, or looks like a carpet, Persian carpet, very mysterious and curious about this photo. I was age of 17, back in 1975, it was January, I was at San Francisco because I went abroad to United States when I was 16 years old. I dropped -- I was looking at the popular electricity magazine, and there were 3 leaves leaving, and I was flipping the pages of this magazine, and I was reading the articles about this magazine and realized that this is a microcomputer photo. And it was the size of fingertip, very, very small chip. And I was shocked. By that time, I was in college and using IBM computer device and doing the programming and just about start learning programming. So when you speak of computer, it's huge thing and very expensive thing as well. So for the normal general people wouldn't really afford these kind of things. However, this was a really fingertip size, a transistor and silicon [indiscernible] printed and actually worked as a computer. So surprised. It was so huge shock for me. So you may have an opportunity listening music or watching movie, which gives you cry and with tears. And I was so impressed and surprised with this photo. So my finger or my hands was shaking. And actually, my tear -- I couldn't stop my tears. And do clearly remember at that time, finally, humankinds may found something that exceeds human's capability because this very first chip, it was very much a similar level of calculator. But sometime in the future, this is going to evolve so that this one chip wafer transistor number is going to be increasing one after another. So it will exceed humans' intelligence someday. That's how I imagined from this photo because human was the most smartest animal on this planet. That was the kind of the understanding by the time. But now here, by ourself with our capability, we human created something that may exceed human itself. So I think -- I thought this will be exceeding humans' intelligence sometime in the future. It was scary, but also very exciting and some kind of happiness or the impressions that came to me and I couldn't really stop crying back then. Human brains actually once receive the big shock that stays in your actual minds or consciousness. So it was like a traumatic event for me, for my brain. I tear up this page, and I put it into the clear file, like you may have a photo by those singers, put it into a clear file and always watch the -- and instead of having idols or the singers, I have this photo of microchip, put it into clear file, put it in my pillow when I sleep. When I go to school, I always carry it with me and always watch it. Every day I carried around. It was a kind of encountering to the admire star for me. And after then, I was very much devoted myself into studying computer program, and when I went to one exhibits -- exhibitions, I learned a lot hearing many speeches, excited about the new technology and so on. So back then was year of age 17. And now I am 67 years old. So just about 50 years ago. SoftBank history as a matter of fact started at this point, I think. Real history of SoftBank actually since 50 years already. And these 50 years, we've been thinking about the technology, which will exceed human beings. And there, we are or I myself to be involved. So that was like a dream, but also determined back in my age of 17, I was very much determined I will be playing very important role or in this world or in this technology sector. Therefore, as you saw on video, ASI, but is it you may have not heard about this word in the past. This stands for artificial super intelligence. AI, you may already hear a lot this word. This is a stance for artificial intelligence. So this AI, artificial intelligence, will become artificial super intelligence. So super in between. So this ASI has intelligence, which exceed humankind. And that is described and represented by ASI, that's openly called by those experts these days. You may hear a lot more often than before about this word ASI. But the concept itself, starting from back in 1975, the concept of such super intelligence was already there, like brain computers so that there are kind of fashionable words 1 by 1 time to time. However, the basic concept itself is always the same, which is the super intelligence exceeding humankind. That's something that we are expecting to see the launch. And I've been having this concept from the beginning, and it has never changed. So why SoftBank has been established? What was the reason for me to start SoftBank? Information revolution, I have been calling it as an information revolutionalist. But more specifically, in the information revolution, more latest edge to the future keep shining objective is ASI. Realizing ASI. That is why we have founded SoftBank. That is, once again, I wanted to share with you. And I believe it is also the time that we should seriously discuss this agenda. Up until now, many people asked what SoftBank do? Because it looks like changing the business segment all the time. Looks like a very mysterious, you may go bankrupt, you're just chasing money. There are so many such criticism by the company. But if you look back the history of the company, we started with software distribution. And then Internet era dawned, then we have invested in U.S. companies related to Internet, and we have also invested in Yahoo! Inc. and set up the Yahoo! Japan joint venture. After then, we have increased the investment towards the Internet. And that Internet came to mobile devices, smartphone devices. So not PC-driven anymore, but smartphone-driven Internet has something that we predicted. That's why that we acquired Vodafone K.K. And now that turned to SoftBank Corp. to start the domestic telecom operations. At the time of the start of this business, we have agreed with Steve Jobs of Apple and start the exclusive sales of iPhone back then, and that has contributed to the development of the mobile Internet and also penetrate to the market. Before then, of course, we have started Yahoo BB. So broadband was another thing that we have also spread in the market. So by expanding the mobile phone market, we have acquired Sprint in United States, merged with T-Mobile, it became the biggest mobile phone operator in the world. This graph represents net asset value, meaning because majority of our holdings of stakes are public company, so they have a market cap of our holding stakes. Less net debt that gives you the kind of a net asset. And this is how you see this graph. Sprint back then criticized. It was a big mistake of investments. But as a result, it became a huge profit for us as well. In addition, Internet also spread to China, so we became the major shareholder of Alibaba. Then established Vision Fund. We have good case, bad case, but these days now that it's turning to profitability. In addition, after the acquisition in the meantime, recorded loss and some people criticized for the failure or a mistake of the investments. However, as a result, it grew largely. So from the value, less net debt gives you net asset value. And as of today, it reached at JPY 31 trillion. So about JPY 14 trillion or JPY 15 trillion market cap is. So actually, half of our assets are the value of the company. So I believe there is some discount there. But that's the money talk, important, of course, but it does goes ups and downs, but I do have a confidence. Money is not our goal, but also we need to keep big passion, ambitious target, then that the number will come along. So many people criticized we are almost bankrupt time to time. However, if you see this one slide, how we have been growing, although there were ups and downs. But still, if you see from the bird view, you see that we've been growing a lot. But this is a past. No that important probably. Most important thing is the future. What are we going to do? 10 years later, SoftBank, what SoftBank will be, what we will be doing, how are we going to contribute to society and people? So this is a page. ASI #1 platform provider that we would like to become. So that's the one word, I would say, for 10 years, platform provider. Sounds a little bit complicated. But in Japanese, it's like an industrial base. And you will be the center of this industry. More specifically, for example, Google in the United States, Microsoft, Amazon, Facebook, Meta, those companies, I will say they are a platform provider. So they are the ones that are setting the industrial base. And of course, on top of that, there are many application layers. But as time goes by, I think that there are 2 groups of the business. Those companies or businesses that you reduce the yield. Because there are always a competition. And those competitors will do the same business with -- as you or you may have a more reasonable cost labor, may imitate the same business like TV, PC, personal computers, those kind of things. Or the home appliances is now more to China or Southeast Asia. So the margin or the yield going down and actually the main base is moving so that it's like low-yield type of the business. As time goes by, your yield is going to go down, your margin will go down. In the past 30 years, Japanese economy is not very good. It's because this is the biggest reason why I believe, because of the -- most of the businesses are low-yield type. Another group is increasing yield type of business. As time goes by, you will increase your yield even more or that we can call it as winner takes all, winners become stronger so that actually takes all the profit. Platform provider is also called as GAFA, Google, Amazon, Facebook, Apple. Those companies are actually the increasing yield type business so that they become even more stronger becoming industrial base. We, SoftBank Group, with the artificial super intelligence, we want to become the platform provider. So you may see like organizer or the orchestrating the business. So I was -- from the beginning, we wanted to be the kind of the organizer of the industry, and that's something that I have said several times in the past. That's something that we've been aiming for. In ASI era, we want to be the platform provider. That's how we are setting our passion for the future. The same passion from the age of 17. Now finally, if this was 10 years ago, 20 years ago, if we talked about AI or ASI and talking about we want to be #1, but people wouldn't really believe me because where in the SoftBank can find an AI, and people may not believe in me. However, now we are very serious. And from bottom of my heart, the time has come. We are ready, we are seeing ASI era very close to us. And on top of that, we have several things that #1 in the world. For example, we have our Director, CEO of Arm, Mr. Rene Haas, with us today. We may want a comment from him as well later on, but Arm is making a rapid growth, keep growing. Household you see around the world. You saw that the ARM-based chip design and also those technologies kind of copyrights, but we call the IP, intellectual property is held by Arm and they provide a variety of design to many companies, and they are producing chip based on Arm design. Cumulatively, we're now reaching JPY 300 billion -- 310 billion number of chips and actually it is increasing drastically. When we acquired, they were very much focusing on chip design for mobile phone. So it was like a very small device only. However, in the past 10 years, Arm becoming -- or able to design variety of and stronger chip, PC, auto, IoT, cloud. When you speak of cloud, you may imagine Google and Microsoft. So that's a kind of a large computing center, data center. And those chip is also using ARM-based chip. It was like a market share of 0% when we acquired this company. But this year, now they are taking about over 50% cloud market share by year-end. And as SoftBank Group, recently, we have announced acquisition of Graphcore, acquisition of Ampere. And those 2 companies, based on such design made by Arm, they will be bringing to the chip production itself, and they have a variety of the technology to do so. Arm is a kind of a beginning process, front process that they are working on. And they are kind of a second half of the process for chip production. And they have such know-how. And adding those 2 process, we can create a chip and these 2 companies hold the second half of the process of chip production. And now that we're having acquisition of these 2 and now that we're having in-house technology in the group. Arm is now entering into ASI and variety of chipset is going to be necessary and such a variety of chip design by Arm may cover almost every aspect of the life. Therefore, SoftBank so far, we have some Japan #1 type of achievements. The customer number -- subscriber number in mobile phones still #3, but we have Yahoo, PayPay, LINE, so on. So there are -- we have some Japan #1 achievement. However, we haven't done world #1 overwhelming #1. In mobile phone around the world, 99% of the smartphones are actually using ARM-based chip. This is overwhelming #1. And ARM is actually center of our AI strategy going forward. Next, OpenAI. In the video, you saw that we started investing in OpenAI and we are a majority shareholder of OpenAI. We have created a lot of joint ventures with them. In the generative AI area, OpenAI is the #1 position globally. I would say they have about 80% of market share. Weekly active user I think exceeded 500 million. It's been only 2 years since they launched ChatGPT product. It's been only 2 years or so, but already 500 million people using OpenAI's ChatGPT. It's been growing so rapidly. And OpenAI is our partner and we have announced a lot of a joint venture initiatives with OpenAI and AI capability offered by OpenAI. Finally, this year, region level where they passed test of post-grad school level. I think only 0.1% of people globally could pass the post-grad test. So it's really over -- well over the intelligence level of human. Already, the capacity or capability at least exceeds average human intelligence. Even further, going forward, it's not the level of just knowing like a Google search, but it starts doing reasoning at multiple levels and there is the concept of AI agent, which acts by themselves. In the past, when you do programming with PC or when you place an order or make an order in smartphone, that's a human's work. Human has to work by themselves, humans have to program by themselves. But since this year, AI is now capable of acting themself what's called AI agent, agentic AI. All you need to do is to say the goal that you want to achieve. Then AI takes an action by themselves, and they put an order checking inventory and open an account and enter addresses so that the products you order can be delivered. And also, AI can do research for you. So all you need to do is to tell them what you want to achieve, result and the goal. You are an investor and you make investment because you want return sooner rather than later. At the moment, you look at a lot of economy news or papers to think whether you should buy this or not. But again, sooner or later, if you have JPY 1 million, and if you want to make it 10x in 1 year, you can just tell the AI, "Select a stock that I should buy and trade the stock in the market on my behalf, and here's what we want to achieve." And then AI agent will ask you, you want to take risk, how much? You want preferred, global stocks, domestic stocks, and you tell them what to do. And then AI will say that, yes, sir. And I will do my best to achieve your goal. So they start working and sweating for you. So you should start using soon rather than late. So the most advanced AI company in the world, which is OpenAI, we signed a deal with OpenAI, allowing us to make more investment in the company. Specifically, together with the investment we already made, we plan to make, the total investment in OpenAI is likely to be JPY 4.8 trillion. OpenAI is not listed companies. And I think this is one of the biggest investment by a company, a single company to invest in unlisted entity. OpenAI's valuation is set to be JPY 40-something trillion. In Japan, Toyota's valuation is around JPY 30 trillion. So OpenAI already exceeds Toyota, which is the biggest company in Japan in terms of corporate value. I think that OpenAI will be listed eventually. And eventually, according to my belief, OpenAI will become the most valuable company in the world. I strongly believe in OpenAI. So in the future, I would look back and/or maybe if you look back and you might regret later, I wish I had invested in OpenAI much earlier. At the moment, OpenAI is again unlisted and it takes a bravery to invest as much as JPY 4.8 trillion in such company. In fact, OpenAI is not profitable yet. But I am all in. I'm all in at ASI world. So Arm, OpenAI and the field of ASI are going to be indispensable companies. And we announced the Cristal Intelligence that OpenAI and us will deliver through the joint venture. Inventory management and technology in our group, about 2,500 systems here and there. So what we want to do is to integrate them and making them into one single super intelligence. So when you ask this crystal ball, the crystal ball well, answer back to you your any question. That's our concept. Starting from sometime around December, the crystal should become available. Once the ASI world comes, so agents that act proactively by themselves and robots will be AI integrated and robots are something physical. So on top of white collar world, if you want, blue collar world, ASI will be integrated in both worlds and every industry will be transformed dramatically inventory management and medical field and manufacturing sector or city building and medical surgery or design, invention, cooking, everywhere, autonomous driving, obviously. Everything will be completely transformative. It's been 50 years since I started having the passion and commitment and when I imagine the next 50 years, I will be excited the way people work, the way people feel happy about or people's lifetime longevity and the relationship with AI. Maybe we may need to rethink ourselves from philosophy perspective because this is a historic moment that is happening. To summarize again, the journey started 50 years ago when I first encountered microcomputer image. And next 50 years, I don't think I'll be there alive or maybe thanks to ASI, my longevity might get prolonged, but the next 10 years, my passion still remains and maybe I might be still healthy. In any case, as a group in the world of ASI, we want to be the #1 platform provider in the world. I have kept saying that the era of ASI should come and in the era of ASI, we want to get the #1 platform provider position in the world. I think this commitment maybe this is the first time to talk about this commitment today. Again, I predicted the era of ASI should come. On top of that, I would say now, we will be the #1 in the ASI world. I am a bad loser. I don't want to lose. I always want to be #1. Whether or not we can achieve, but definitely, I am committed to becoming #1. We have been surviving even though somebody might call us [ comment ] or dubious, but we have been surviving. We have been running business, and we have been making sure that we have financial resources and user base so that we can take risk sometime. So we have been going through such preparation process. And now is the time that we could say we wanted to be -- we want to be #1 platform provider in the era of ASI. Here is my commitment. Again, we don't know whether we can achieve it or not. But sometimes it's difficult to achieve that. But so long as you have a strong conviction and belief and actions that you take, I think that's most important. So it started with one single chip design and ASI, artificial super intelligence. And it should evolve from something focused on capability to something more compassionate and deeper connection with people. It's difficult to distinguish between Japanese word [Foreign Language] and [Foreign Language] in English, both could be interpreted as intelligence. And [Foreign Language] maybe just focus on capability, but the [Foreign Language] in Japanese would more like compassionate and deeper connection with people. So somebody that you want to have as a friend and family and somebody that you want to admire and respect. If that somebody has the capability, you may not respect the person, but in the world of digital, compassionate someone and if someone has ability, capability far better than human, but if they don't have compassion and love maybe people might be distinguished, but I believe that AI are not full. AI are not motivated to destroy human because humans are the ones that created AI and nurtured AI and for the happiness of humanity, I believe that AI shared value with us. I do use ChatGPT every day. And when I have some concerns and share with AI, they give me -- and there are compassionate answers. For example, I have a stomachache, what should I do? And AI gives me an answer with end note like take care of yourself or some doctors may not be empathetic anymore. But AI is rather, I think they already are having compassion and empathy. So when [Foreign Language] becomes [Foreign Language], evolving from something focused on capability to something more compassionate, our corporate philosophy, information revolution happens for everyone. What AI before, what should AI for because we want to make people happy. That's unfolding conviction and commitment and promise I can make for you. Again, I declare here that we will strive for becoming #1 in the ASI world. Thank you very much for your attention. Thank you. Well, today, during presentation, I believe that I was much calmer than usual. If so, some people might say that I may be a little tired. I'm very thrilled. I'm very excited. When you're excited and even you are excited, but you can speak calmly means that you are determined and you are so convinced. So to me, I would say to myself that, yes, I've done it. I've made it. So when I have that kind of clear thoughts, then I can be calm. Sorry, maybe my talk was too big, but this is how I feel right now. Well, I was really comfortable speaking to you all. Now we will now move on to the Q&A session. So the moderator will explain how it will proceed.

We will first address pre-submitted questions followed by questions from shareholders on site. [Operator Instructions] Next, we will answer online questions submitted today regarding the matters presented at the meeting. Each online shareholder may submit one question. We will finish taking online questions in 5 minutes from now.

Let us begin with pre-submitted questions. Moderator will read them aloud.

To ensure that the SoftBank Group continues to grow for the next 300 years, how you can foster and pass on the necessary human resources to achieve this?

In order to continue to grow for the next 300 years to become a company like that, I have mentioned about that so far a couple of times. And I am very serious about this. It's not exaggerating. In the long-term perspective, I would like to make this company as such and to do so, to continue to grow, and the industry has to be well selected. So information revolution has just begun. 100 years, 200 years and 300 years onwards, I strongly believe that this would continue and remaining in this industry, there are more opportunities. So nurturing human resources, including the young talents and gathering excellent talents from all over the world, and we do have hundreds of group companies. And among those companies, people would compete and also given a theme so that they can challenge to. And then we also will select the excellent talent and also provide opportunities to those talents. And among those hundreds of group companies and from competition, they will be nurtured. It is quite difficult to find an excellent talent from outside. So therefore, since we are in this competitive industry and advanced industry, so we believe that excellent talent will be nurtured among those group companies and through the competition.

Questions to Dr. Matsuo. In your view, what are the technical challenges that must be overcome for the world of HEI and ASI in vision by Mr. Son to become reality.

I may talk a little bit technical stuff. But currently, GenAI is basically based on a model called transformer. The transformer model, there are some technical issues around transformer. And the question is, can the transformer overcome such technical challenges. And the reasoning, like Mr. Son mentioned earlier, inherence model -- inference model, how much performance it can deliver and the relationship with open-source products and solutions, those are technical challenges or issues that you may need to overcome. But globally, a lot of researchers working hard to overcome those challenges and great talents, obviously, they are in OpenAI. I think that those challenges will be resolved as time goes. So from a macro perspective, I don't think any critical technical issues.

To what extent do you consider a gap between NAV and market cap to be acceptable? In order to enhance the company's market cap, are you considering the shareholder returns such as dividend increases or share buybacks or aiming to grow the market cap by driving profitability at subsidiaries like Arm through the execution of Stargate project?

In the presentation just before, I've pointed out rather than asset value, our market cap is almost half, and that's how it's been dealt and it's discount. I don't know if it's called Masayoshi-san's discount. But our shareholder is -- sorry, share price is being impacted. And as for shareholders, I think it's an opportunity. So why it's so low? The share price is low? Well, it's low, so let's buy it. I think it's an opportunity we could say so we -- I have done share buybacks time to time. And so the cash in hand and also some capital has to be kept for investments. So therefore, I believe that there will be opportunity for share buybacks in the future as well. But when is not something I can answer right now. But yes, there is a possibility for that in the future. But more importantly, even though I say it's a discount, it's not as big as like 10x or more. So the point is that whether you can grow this company tenfold or more in the future. So that's why, as I said, that I made a commitment to myself that we would become ASI #1 platform. So we do have potentials, and we are in the position to be able to become -- so how to increase market cap is that...

Next, we will take questions from shareholders on site. [Operator Instructions] Are there any questions? In the Block C, somebody who has the purple card.

My number is 420. Thank you very much for such an exciting presentation. My question is about your relationship -- or relationship between OpenAI and Microsoft. It's been not going well according to some press. Instead of Microsoft, maybe OpenAI should have accepted investment from you, not from Microsoft in the beginning. So again, when you go ahead, the worsening relationship between Microsoft and OpenAI could have a negative impact or rather a positive impact?

Well, negotiations and discussions between OpenAI and Microsoft are something that they are working on by themselves. So I'm not in a position to make a comment on that. Your question about OpenAI should have got an investment from SoftBank or not? Well, to be honest, actually, before Microsoft invested like $10 billion or so, before that, I met a Sam of OpenAI, and he asked me, would you like to invest in my company? And I will say, oh, I will do that. And how much I asked him and he said maybe $10 billion, but they were not listed and they didn't have any revenue at all. And he asked me would you like to invest in me? And I said, yes, I would. I was serious because I had financial resources, thanks to Vision Fund performance. But obviously, Sam talked to other potential investors and eventually, they picked Microsoft. If I were Sam, I wouldn't choose Microsoft, not SoftBank. See, the same amount of money. Well, SoftBank was smaller than we are now. And Microsoft, on the other hand, had global supply chains. They have technical talent and they have brand value. So in any way, Microsoft was much bigger than us. So eventually, they selected Microsoft. But my conviction remained the same since then. In fact, recently, my conviction gets stronger and stronger about OpenAI. No matter what would happen between Microsoft and OpenAI, SoftBank still remains believing in OpenAI and even deepened relationship with OpenAI.

My number is 0401. Super intelligence [Foreign Language], you talked about. So AI moves around human and in position as management position and control human in the future.

Well, it's not that ASI gives us the controls human but provides suggestions and ASI is also better than the robots and giving suggestions. Whether to accept it or refuse it is up to human and -- but discussing over and over. And if a suggestion by ASI is something that you feel like you're convinced enough then you may find that you want to follow their suggestions more than before. So AI shogi and these days also provides like AI judgment. And you also believe that judgment. So compared to human judgment, and in the shogi case, and you may believe what AI judgment is rather than a professional shogi player. So the weather forecast is also the same. So I think more and more ASI would be reliable. So it can be close to the situation where ASI also can sit in the position of management. So ASI, I just strongly believe that ASI will develop to the levels of where they can grow well.

My number 927. Question about your successor. There was Nagamori-san in the Board before and it looks Nagamori-san had struggled to select his successor in his company, Nidec. So I think you might want to have about 3 candidates and train them before selecting 1 and there are not so many people out there who are knowledgeable about AI and Vision Fund. So I think my suggestion will be having 3 or so candidates to pick.

Well, I didn't say inside or outside the company. In my mind, actually, I have potential candidate successors in my mind. They are among our group. So there is no such thing as there's no successor at all at the moment. So they are working every day. They are exposing themselves into those areas every day. So inside our group, they are growing, and they being nurtured, but it's very difficult until the very last minute to select my own successor. Those 2, 3, 4 candidates in my mind. At which point, I should make an announcement? Well, I don't want to get them complacent or get greedy or get bossy. So of course, you need to anticipate some risk, my health or accidents. So always, I know I have to be prepared myself. Next the rear-seated A area with the blue card.

And add to that, I will appoint someone from the rear seat. My number is 790. The reason why I hold SoftBank shares is that it's not something specific to Mr. Son, but I'm so attracted to your personality. I've not read your book, but I'm so attracted to you. So that's what I hold SoftBank Group's shares. When I joined last year's AGM, so you believed in AI or ASI, and I feel like you feel so close, so affectionate to AI, not AI, but to human, what if you were to say not to AI, but what you can rely on to human, what would you say?

Well, human-to-human, heart-to-heart enjoy together and also have a dream to work towards and to share meals. And you don't have meals with the computer, but whenever I have meals, I am with my colleagues, with my business partners, so almost every time I have a meal, I'm with my business partners or colleagues. So now with the computer. So to share happiness with human, but as also mentioned, from my bottom of my heart -- so as I would heal the humans illness or to alleviate pain and grief and to provide happiness and I believe in that, that's why I have a strong belief in that, but sharing some happiness and also how you feel compassionate is something that you can share with people, human. And the next question is in somebody in Block B.

My number 0747. I believe that you want to contribute to evolution of AI. While users and clients rely on AI going forward, of course, there are some risks against some outages or any other problems. So I wonder what do you think about risk associated with too much dependence on AI?

Yes. AI will become a social infrastructure and industrial base and technically, we would say redundancy. By that, what I mean is, even though a system fails, next, a system takes over to make sure that work continues without disruption. So redundant design is becoming more and more important, and we always keep that in mind. When mobile outage takes place, obviously, there are people that have troubles. So even though one system fails, we want to make sure redundancy is in place. So that network -- mobile network continues to deliver services. Still, failure happens. So again, redundancy is becoming more and more important and cyberattacks can be also a risk. But with ASI -- so long as very, very powerful ASI, even though a tax take place. I believe that we can also -- we can still protect ourselves with very powerful ASI. Thank you for your question. A person with the green card.

My number is 0237. To Mr. Masayoshi-san, I'm here to ask this question. Why you keep investing? I'm an investor and you said that we are all investors. I'm very honored that I am one of the investors to hear that. So why you keep investing? And what is the ultimate purpose of investment?

The border between business and investment is not so crystal clear, I believe. So a company up to 100 employees, so one business but when the company grows to JPY 10 trillion or when the company scales up and with group companies and you reduce the number of group companies or you reduce or increase the number of staff, that is also done by the management perspective and also the investors' perspective. So towards the world of ASI, including start-ups, so I want to act like investors and also as a business person. So -- but the purpose is crystal clear, as I mentioned in the presentation that we would become ASI #1 platform. So therefore, to achieve this, we established a new business. So you have not directly involved in our business, but you -- as an investor, we are the same peers towards the same goal with the same dream. So that, I really appreciate your participation as shareholders. Thank you.

My number 394. In the video, I found the picture of you with Mr. Trump. So my question is, what's your staff -- stance? What's your philosophy in terms of how you relate with the U.S. government, how you deal with the U.S. government?

No matter who, I wouldn't get involved with any particular politicians like I didn't -- haven't make donation to them. But as country, like America or India or wherever it is, in terms of business, maybe I can contribute to the country's growth by investing in business in that country if those are related to win-win relationship with the country and us. And the center of AI center of revolution at the moment is in the United States, and when it comes to building a huge social infrastructure in the country like U.S., there are cases where you need to directly negotiate with the U.S. government. In that sense, I often visit the White House to meet with ministry-level people. It's because the United States is the center of revolution. And in order to do business in the U.S., you need to have necessary approval and we need to communicate with them to let them know our philosophy, and you need to gain trust from them. I have done this, and I will do this continuously, again, not only in the United States but other countries as well. But at the moment, U.S. has the biggest opportunity for us to achieve our goal. Next, in G Block with an orange card.

My number is 658. With the ASI evolution, if your life expectancy extends then would you continue managing SoftBank? Or you will rely on ASI to succeed?

If I were healthy and if I believe that it will be better for me to stay as a leader then I would love to continue. But if I would become a bottleneck to future growth of the company, then, of course, I would hand on -- pass on to my successor. So SoftBank Corp., CEO Miyakawa, telecommunications operation company, and he's doing well, and I have a full trust on him. And I would love to see my successors to be nurtured, but I still have a passion, so I would like to do my best. Whether ASI can replace, I don't think that would happen, but utilizing ASI in the maximum manner and also, everyone could utilize ASI then I think that would be ideal. So somebody with the white color board in that block, please?

My number 798. So you want to be the #1 platform provider in 10 years in the world of ASI. And I'm sure that you have a high expectation from OpenAI. Then the question is, how are you going to monetize ASI in 10 years? So looking ahead 10 years, what kind of vision you have in terms of our monetization? At the moment, do you have any blue point in your mind in terms of how you're going to monetize?

In 10 years, at least 5% of GDP globally would be delivered by ASI companies or few of ASI-oriented companies would enjoy the fruit of their work. 5% of global GDP will be JPY 13 trillion. And I would say 4 of such ASI companies would share the JPY 13 trillion or something. And those companies are increasing yield type of businesses. And they should be able to get about JPY 600 trillion of profit. And I'd say that you get more gain than investment made. So that level of scale and that level of position, I would want to be 1 of those 4 or 5 companies, ASI companies that deliver to the global GDP. It's not the promise I can make. If I make a promise, somebody might sue me later. So I don't want to get myself into trouble, but I have that level of commitment. Even though the number would turn out to be small for us, it's just a margin of error. In the big picture, it's just a margin of error. So again, so long as we are positioned, we should be able to position ourselves at that level sooner or later. Direction-wise, I think that we want to be in such a position in 10 years' time. A female shareholder. You're raising hand, but you're not female. With -- in the A Block with a red card.

My number is 370. So I usually invest in U.S. stocks. And I check media often. So compared to the U.S. and Japan, how people pay attention to AI industry is very different. And in Japan, it's not as much excited -- exciting as in the U.S. in terms of interest in AI. So what are your thoughts on that?

Absolutely. So in the U.S. -- so AI is being utilized the most in the world right now and the technology innovation is way advanced. The second place is China. Well, excellent technologies on AI available in China. Unfortunately, Japan is way behind. So there are some pros and cons and some criticism on AI. However, on media in Japan and those with knowledge and expertise, I would motivate them all to make this more exciting. And since you are all here and -- so you, as investors here for SoftBank Group Corp., and I know that you have more interest in AI. So today, there are some media here and -- so I don't want Japan in the future to be also still remaining way behind of the other countries. So Dr. Matsuo here today and is an expert in AI. So I would like to see AI will be more spread.

My number 0510. Looking at a newspaper, you have a Stargate project and it looks like JPY 78 trillion in 4 years is the investment size that you seem to have. I think the digit goes up from 1 to 2, JPY 78 trillion that is. And how are you going to finance? Can you finance that level people may wonder. Looking at the SoftBank Vision Fund, which started with about JPY 10 trillion, and half I think you started financing from countries like Middle East. But the JPY 78 trillion, how are you going to finance that level? Even though you were able to finance that much, well, people would say that it's difficult to monetize from AI. And Sam in OpenAI, so he seems struggling whether his company organization should be a nonprofit or not? And you mentioned earlier that profit margin could go as high as 50% in such ASI businesses. So again, how are you going to achieve -- how are you going to finance JPY 78 trillion? If you invest JPY 78 trillion, how much return you could expect?

Thank you for your question. About financing, it's not investment in the bulk, JPY 78 trillion. We are going through phases, like Phase 1, 2, 3, we will expand investment size. Even in 1 phase like capacity-wise, it will start from 1 gig and go to 4 gig and 7 gig. And also depending on where the data centers are located to 100 megawatt, 200 megawatt. So we will build those data centers, and we will aggregate gradually. So we start from small and grow them bigger. So what we are looking at is project finance way, SoftBank, OpenAI, put capital and by project finance should be made through the project finance scheme, like investors or many managers, like banks or insurance companies for different projects, looking at OpenAI's revenue at that time or the potential timing of IPO, looking at those conditions, they are making decisions accordingly. So I believe that I should be able to finance going through those phases. And in fact, we will embark on a particular project in a particular place. And as you can see more, I think you should be able to have a better understanding about how we go. And about the profitability, again, OpenAI launched service just 2 years ago or so, but they have been seeing revenue twice as much. I think looking at the latest data of OpenAI, maybe as of May or June, $10 billion annually are being generated by OpenAI. Back in December, it was $5 billion. So from December through May, they saw revenue growth 2x. And if the growth pace is the same, then eventually, their revenue will be huge or substantial. And investment needed in compute. I think a few years ahead they can become profitable. But right before, likely to be profitable, IPO could happen. Looking at Amazon and Meta and Google, they have become a huge entity and generating huge profit, but at the time of IPO, they barely made profitable or still lost money. And Alibaba, in the same year where they are listed, they were losing money. But eventually, they were able to generate a lot of profit and market cap skyrocketed. So investors and analysts make great predictions. So in a few years' time, I believe that OpenAI is ready for IPO and structure for them to become a listed company is something that's being discussed and being prepared. So that's how we see OpenAI. So I have no doubt. And next, Block A with the blue card.

My number is 612. I'm afraid but you are in the U.S. and you met with U.S. investors, and you often meet with the great people in the U.S. So what is the situation in the encrypted asset? And what is your thoughts on those right now?

Well, even though I had also gone through up and downs, cryptocurrency, for me, has already been able to acquire sort of recognition in public. So that value goes up and down. I wouldn't say that everyone should invest in that. But worldwide, it's been penetrated and how to utilize it is also varied. And so the cryptocurrency has acquired some sort of recognition worldwide. Personally, I've invested in it, and I sold it in a short period of time. If I had kept it, I would have earned quite a lot. The reason why I sold it quickly was that because you have to keep watching it. And so often, if so, then I had -- I could not focus on my own business. So I had never really invested in something else other than SoftBank-related shares. So in my mind, I -- personally, I don't want to spend my mind or energy for something other than SoftBank-related things. So you have to keep watching how the cryptocurrency goes -- moves around. So I felt that was not healthy for me. I wanted to just focus on SoftBank. That's why I sold it, but Bitcoin, digital currency I've never really refused. So I believe that it will be split more. Next, somebody in the Block B with the black card.

0431, this is my number. My dream became true because I wanted to talk to you in person. DeepSeek, one of the Chinese models has a strong impact in the world with high performance, not only how smart, how easy and how cheap it is to use AI. So that -- in that sense, our competition has become fierce and fierce. And in that circumstances, as a SoftBank Group, a balance between quality versus price, how are you going to keep your competitive advantage in terms of balance between performance and cost?

Yes, DeepSeek is a group of companies that have greater technical talents. But in principle, America's OpenAI and Google and Anthropic, those American companies are creating AI with great parameters. And as a trainer's model in an upstream process. So again, what DeepSeek is doing is to utilize such a teacher model created by Google, OpenAI, Anthropic, and they are just focusing on student model, if you will, to spend money less and to use compute power less. It's not because DeepSeek could do by themselves. After the most advanced models are created by somebody like Google or OpenAI, more compressed one like a o3 or mini, which was able to reduce the cost. And cost down would be more and more common place, like a 99% discount within 1 year, for example, was actually achieved, but every time cost goes down, then advanced one will be also released as well. So the most advanced model would require more computing power. And also, there are cost down versions or compressed versions of those models, which are a little bit behind the most advanced one. So if you are okay with a little bit behind one, of course, you can have cheaper ones, but competition is very, very severe. The companies that have the most advanced model could win. So the most advanced model, of course, would be evolved even further. And maybe the most advanced models that are in -- companies that create most advanced model would get more revenue and more profit, I guess. The very front with the red card.

My number 221. Thank you very much for such a precious speech. So as I heard your big dream and you mentioned that in 10 years from now on, you should be able to sustain this position, I would really hope so. When I was looking at the presentation, those graphs, 5x, 10x of NAV change. So -- and I believe that SoftBank will become the #1 company in Japan. So now end market in Japan, the last 30 years has been revised. And also the Warren Buffett invested in Japan, that's one thing that the market has picked up. So from that perspective also, so the share price 30 years ago have been surpassed, and I strongly hope that this trend would continue. And I would also like SoftBank to become the leading company in Japan moving forward. Yes, I would -- I'll do that.

So as I said earlier, so I would like to become ASI #1 platform in the world. So with our entire group company, we would like to become so. So my determination, yes, I will make it happen. Well, it's about time. I would like to take questions from 2 more shareholders. So somebody in the block D, please?

765, I was surprised to be called upon. Share price. Of course, share prices go up and down. And obviously, corporate value will be evaluated by stock price. We're shareholder and we're interested in your share price. And the share price will be determined by market we often hear. But Mr. Son share price I wonder how share price be determined reasonably? Do solve the mystery with AI? Or what do you think?

I think a simple formula, I have a very simple formula in my mind. To calculate share price, I have a simple formula in my mind. What is that? In 10 years, 20 years, how much free cash flow post tax -- after tax, how much free cash flow -- after tax, depreciation and everything, the pure free cash flow that you have in your hand in 10 years, 20 years and 30 years, the total amount of free cash flow and discount by present value. So if you divide back to the present value, I think that should be the company's value. Looking ahead 10 years, 20 years and 30 years, it's up to people, how you project in the future in terms of growth potential. When you discount back, you need to consider interest rate, for example. So with inference of ASI, based upon varieties of data sets, then the most reasonably explainable share price can be calculated by ASI. In the past, a lot of Internet companies' share prices went up and down, but now they are making profit. And I think the companies' performance are relatively related to the share prices. Again, it's important for a company to make sure that they can keep growing in the future. Even though you play a cheap trick, you can't sustain for long term. And I think you can refer to the prediction by ASI sooner rather than later, when you determine you buy or sell stock. So one last question from the front seat with the purple card.

My number 424. What would you do if you had JPY 1,000 trillion.

I would just invest in establishing base for ASI. Well, thank you very much for your questions from the venue. Now we have questions from online participants. And let me try to answer those questions. The moderator will read them aloud.

Share split or increased dividend? Are you going to consider them in the future?

Well, when necessary, we are ready to execute them. But again, I don't think I should make a comment about the future.

So by reinforcing the investees and the group companies, so I think that we can expect to accelerate the growth of group companies. What's your thought on that?

Well, investment activities with OpenAI or the joint venture with them, so in Japan, SoftBank Corporation led by CEO Miyakawa, so they -- with them Cristal Intelligence. So Cristal Intelligence is catching attention by major enterprises in Japan. So I believe that there will be a great synergy effect among us and LINE, PayPay and old -- so with AI features and they have been working very hard to come up with new service. So already there is synergy there. So there are some companies which specialized in AI. And so with them and also the Stargate project all these robotics companies and -- so by collaborating with them and the -- further growth can be expected. So we have been seeding quite enough. So those will be mingled and then grow even stronger.

The last question about Cristal intelligence. Could you give us an update on how Cristal Intelligence goes?

SoftBank Corp. established a dedicated team as of April 1 called SoftBank OpenAI preparation office. And there is a challenge assigned to each and every employee and every employee is encouraged to make 100 AI agents. The campaign or competition started just a few days ago. And every day, the employees are making by themselves, AI agents, several hundreds. In fact, server capacities are not enough to deal with those AI agents created by their own employees. So that's the SoftBank Corp. So what I'm trying to say is internally, within a company, first, they will make an AI agent -- a huge number of AI agents. We have a specific number in place as a goal and obviously the #1 AI agent in the world would be utilized internally by December. So SoftBank by themselves become a use case first before delivering the capability to clients Yahoo!, LINE. So group companies would start using those AI agent AI capability by themselves before delivering Cristal Intelligence to our clients. And from OpenAI's perspective, it's a huge enterprise client for them. One enterprise group pays OpenAI several hundred billion yen a year. So for the future of OpenAI, I think it's going to be a huge test case. Thank you so much for all your questions. Let's now move to voting. Moderator will explain how to proceed.

Online shareholders, please cast your votes on all proposals and then click the exercise button once. Voting is done in one batch. While tallying the online votes, we will proceed with the in-person votes. We will now vote on each matter. Online shareholders, please cast your vote via the Internet. Proposal 1, appropriation of surplus that is to say dividend. If you agree, please clap your hands. [Voting]

Proposal 2, election of 9 directors. If you agree, please clap your hands. [Voting]

Proposal 3, election of 3 Audit and Supervisory Board members. If you agree, please clap your hands. [Voting]

Proposal 4, revision of remuneration in the form of stock options for directors. If you agree, please clap your hands. [Voting]

Please wait a moment while we confirm the voting results. Voting results have been confirmed. All 4 proposals received the majority of affirmative votes. Now all the proposals have been approved in the form proposed.

That concludes the proceedings of this meeting. I hereby declare the 45th Annual General Meeting of Shareholders closed. Mr. Uno and Mr. Otsuka retire from their roles as Audit and Supervisory Board members at the conclusion of this meeting. Thank you very much for your contributions. And here newly appointed Audit and Supervisory Board members, Ms. Nishibashi and Ms. Kanamaru. Last but not least, I would like to share my favorite video to conclude the meeting. [Presentation]

Thank you very much.

Thank you very much for attending the Annual General Meeting of Shareholders of SoftBank Group Corp. Please make sure you have all your personal belongings. The exit can be crowded, so please proceed slowly. Thank you so much once again for your participation. [Statements in English on this transcript were spoken by an interpreter present on the live call.]