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Analysts divided on AI investments' impact on SoftBank's

profits

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Swiggy's market debut may boost SoftBank's unlisted tech

portfolio value

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SoftBank's AI investments may require asset sales or

increase

debt

By Anton Bridge

TOKYO, Feb 10 (Reuters) - Japan's SoftBank Group

is set to make a quarterly net profit of 234 billion

yen ($1.54 billion) on Wednesday as shares in its

telecommunications holdings edge up and the post-listing

performance of Swiggy is seen boosting the value of

its portfolio of unlisted technology startups.

Analysts are divided, however, on whether the spate of

artificial intelligence-related investments SoftBank has

announced in recent weeks will help or hurt the Japanese

technology investment conglomerate's bottom line.

The profit of 234 billion yen is based on the average of

four analyst estimates compiled by LSEG, and compares with a

gain of 950 billion yen in the same period last year.

SoftBank is expected to bank further investment gains on U.S.

telecommunications subsidiary of Deutsche Telekom

T-Mobile US, whose shares hit an all time high in late

November and rose 7% over the quarter.

Also in November, Indian delivery firm Swiggy jumped 17% on

its market debut and had risen almost 20% by the end of

December.

This may signal a recovery in IPO markets, particularly in

India, and so trigger a bump in the valuations of SoftBank's

several-hundred strong portfolio of unlisted tech firms,

analysts say.

More uncertain is the future impact of the major artificial

intelligence investments announced over the past two months.

SoftBank CEO Masayoshi Son's pledge in December to invest

$100 billion in AI projects in the U.S. over four years could

entail selling or monetising portfolio assets or taking on

excessive debt, Jefferies analyst Atul Goyal wrote in a note.

Alongside, last week Son announced a new joint venture with

ChatGPT maker OpenAI to offer AI services in Japan for corporate

customers and roll out OpenAI products across SoftBank's

portfolio companies.

While some analysts say this may bring efficiency gains at

portfolio companies, others say the $3 billion annual usage fee

paid to OpenAI could diminish near-term earnings.

($1 = 152.2600 yen)