SoftBank's Profit Rebounds on AI Investments, Driven by Nvidia & OpenAI

Japanese technology conglomerate SoftBank Group Corp. has staged a remarkable financial turnaround, reporting a robust 421.8 billion yen ($2.9 billion) profit in the April-June quarter. This impressive rebound comes after a 174 billion yen loss in the same period last year, largely fueled by its strategic investments in the burgeoning artificial intelligence sector.

The Tokyo-based conglomerate, a significant investor in leading AI innovators such as Nvidia and OpenAI, saw its quarterly sales climb 7% to 1.8 trillion yen ($12 billion). SoftBank’s founder, Masayoshi Son, has long championed the transformative potential of AI, consistently emphasizing its pivotal role in the future economy. This quarter’s results underscore the wisdom of that conviction, as the company’s stakes in chip manufacturers like Arm Holdings and Taiwan Semiconductor Manufacturing Co. (TSMC) also reaped substantial rewards from the surging demand for AI infrastructure.

While SoftBank’s financial performance often fluctuates due to the high-risk, high-reward nature of its diverse portfolio held through its Vision Funds, senior executive Yoshimitsu Goto conveyed a renewed sense of optimism. “The era is definitely AI, and we are focused on AI,” Goto told reporters, acknowledging the inherent volatility of an investment firm. “An investment company goes through its ups and downs, but we are recently seeing steady growth.”

Beyond AI, other significant holdings within SoftBank’s vast portfolio also contributed positively to its earnings. A notable example is Coupang, the South Korean e-commerce giant often dubbed the “Amazon of South Korea,” which has successfully expanded its operations beyond Seoul into the U.S. and other Asian markets.

Looking ahead, SoftBank continues to actively manage its portfolio through strategic public offerings. Preparations for an initial public offering (IPO) for PayPay, its cashless payment system, are reportedly progressing well. This follows successful recent IPOs for Chime, a U.S. “neobank” providing accessible banking services, and Etoro, a popular personal investment platform, further diversifying SoftBank’s liquidity events.

The positive earnings announcement was met favorably by the market, with SoftBank Group stock climbing 1.3% on the Tokyo Stock Exchange, building on gains from the previous year. The results signal a strong recovery trajectory for the investment giant, largely validated by its unwavering bet on artificial intelligence.