SoftBank's AI Investments Drive Profit Rebound

Japanese technology conglomerate SoftBank Group Corp. has announced a significant financial turnaround, posting a robust 421.8 billion yen ($2.9 billion) profit for the April-June quarter. This marks a dramatic rebound from a 174 billion yen loss recorded in the same period a year earlier, largely fueled by its strategic investments in the burgeoning field of artificial intelligence.

The Tokyo-based investment giant, known for its substantial stakes in AI pioneers such as Nvidia and OpenAI, saw its quarterly sales climb by 7% to 1.8 trillion yen ($12 billion). This resurgence underscores the company’s deep commitment to AI, a vision consistently championed by its founder, Masayoshi Son, who has long asserted AI’s transformative potential. Beyond its direct AI software and service investments, SoftBank has also benefited from its holdings in critical chip manufacturers like Arm Holdings and Taiwan Semiconductor Manufacturing Co. (TSMC), both of which are central to the infrastructure powering the global AI boom.

SoftBank’s financial performance has historically been characterized by volatility, a natural consequence of its high-stakes venture capital model through its Vision Funds. However, recent trends suggest a more stable trajectory. Yoshimitsu Goto, a senior executive at SoftBank, emphasized this shift, telling reporters, “The era is definitely AI, and we are focused on AI. An investment company goes through its ups and downs, but we are recently seeing steady growth.”

While AI investments were a primary catalyst, SoftBank’s diversified portfolio also contributed to its strong quarter. Notable successes include Coupang, the South Korean e-commerce giant often dubbed the “Amazon of South Korea,” which has expanded its operations into the U.S. and other Asian markets. Furthermore, SoftBank’s investment in Chime, a U.S. “neobank” that provides accessible banking services, and eToro, a popular personal investment platform, have also yielded positive returns. Looking ahead, the company is actively preparing for an initial public offering (IPO) for PayPay, its widely used cashless payment system, signaling continued strategic moves to unlock value from its holdings.

Following the announcement of its strong earnings, SoftBank Group stock responded positively, climbing 1.3% on the Tokyo Stock Exchange. This performance reflects a broader upward trend for the company’s shares over the past year, as investors increasingly recognize the fruits of its long-term AI-centric strategy.