SoftBank Returns to Profit With AI Bets and Telecom Boost

Japan's SoftBank Group (TYO:9984) posted its first annual profit in four years, reporting 1.15 trillion yen ($7.78 billion) for the fiscal year ending March, a significant turnaround from last year's 227.6 billion yen loss. The strong recovery was driven by robust telecom earnings and soaring valuations in late-stage startups.

SoftBank’s January-March quarter alone saw profits surge to 517 billion yen, more than double the figure from the same period last year. Gains from T-Mobile US (NASDAQ:TMUS) and Deutsche Telekom (OTC:DTEGY), both hitting record highs, provided consistent returns for the tech giant.

Vision Fund 1, which targets mature startups, recorded a 940 billion yen gain, boosted by higher valuations in ByteDance (TikTok’s parent company) and e-commerce firm Coupang. In contrast, Vision Fund 2, focused on earlier-stage companies, suffered a 526 billion yen loss.

The company is ramping up investments in artificial intelligence, signaling its most aggressive spending phase since launching its Vision Funds. In March, SoftBank committed $6.5 billion to acquire U.S. chipmaker Ampere and pledged up to $30 billion for OpenAI, the creator of ChatGPT.

It is also spearheading financing for “Stargate,” a $500 billion U.S. data center project, leveraging project finance loans for most of the funding. These bold AI and infrastructure investments mark SoftBank’s bet on future tech dominance, but rising U.S. tariffs have raised concerns about market volatility.

SoftBank’s strategy reflects the high-risk, high-reward nature of its tech investments—exemplified by the success of Alibaba (NYSE:BABA) and the collapse of WeWork (OTC:WEWKQ). As it dives deeper into AI and digital infrastructure, investors are watching closely to see whether these massive bets will pay off.