TOKYO, Aug 7 (Reuters) - When Japan's SoftBank Group

reports earnings on Thursday, its mammoth investments

in artificial intelligence companies are set to take the

spotlight.

Analysts and investors are keen for updates on how they will

be financed, the timeline for returns to materialise and whether

assets will be sold to fund the new projects.

SoftBank has embarked on its biggest spending spree since

the launch of its Vision Funds in 2017 and 2019.

It is leading a $40 billion funding round for ChatGPT maker

OpenAI. SoftBank has until the end of the year to fund its $22.5

billion portion, although the remainder has been subscribed,

according to a source familiar with the matter.

It is also leading the financing for the Stargate project -

a $500 billion scheme to develop data centres in the United

States, part of its effort to position itself as the "organiser

of the industry," founder Masayoshi Son said in June.

SoftBank has yet to release details on what kinds of returns

its financing of the Stargate project could generate. The extent

of third-party investment will determine what other financing

tools, such as bank loans and debt issuance, it may have to

deploy.

In July, SoftBank raised $4.8 billion by selling off a

portion of its holding in T-Mobile.

"If other sources of capital are less supportive, SoftBank

could look to asset-backed finance, which is collateralised by

equity in other holdings," Macquarie analyst Paul Golding said.

The Japanese conglomerate is expected to post a net profit

of 127.6 billion yen ($865 million) in the April-June quarter,

according to the average estimate of three analysts polled by

LSEG.

That would mark SoftBank's second consecutive quarter of

profit and follow its first annual profit in four years when it

was helped by a strong performance by its telecom holdings and

higher valuations for its later-stage startups.

Its results are, however, typically very volatile and

difficult to estimate due to manifold investments, many of which

are not listed.

SoftBank's performance in exiting from investments and

distributing profits has been patchy of late. The Vision Funds

had made a cumulative investment loss of $475 million as of

end-March.

That said, 13 of 18 analysts have a "buy" or "strong buy"

rating for SoftBank's stock, according to LSEG.

Although there is some concern in the market that AI-related

valuations have become bubbly, they continue to climb.

OpenAI is in early-stage discussions about a stock sale that

would allow employees to cash out and could value the company at

about $500 billion, according to the source - a huge jump from

its current valuation of $300 billion.