SoftBank Swings to Profit on AI Bets
SoftBank Group reported a return to profitability in the fourth quarter of 2025, posting a net income of ¥248.6 billion. The turnaround was driven by a $19.8 billion gain from its AI-focused investments, including stakes in OpenAI and its Vision Fund portfolio companies. The strong performance and rising earnings per share are prompting analysts to re-evaluate the long-term investment case for the Japanese technology conglomerate.
- This current profitability marks a sharp reversal from a period of significant losses, including a record $32 billion loss for the Vision Fund in the fiscal year ending March 2023. - The positive result is heavily dependent on the surging valuation of a single investment, OpenAI, which has successfully masked valuation losses in other portfolio companies such as Coupang and Didi. - Under CEO Masayoshi Son, the company has shifted from a "defense mode" to an AI-focused "offense mode," increasing AI-related assets from 18% to over 60% of the firm's net asset value in the past three years. - SoftBank's total investment in OpenAI now stands at $34.6 billion, securing an ownership stake of approximately 11% after completing a $22.5 billion follow-on funding round in December 2025. - The company's AI strategy aims for vertical integration, extending beyond software to include the $6.5 billion acquisition of U.S. chip designer Ampere Computing and a pending $5.4 billion purchase of ABB's robotics business. - To finance this strategic pivot to AI, SoftBank has been liquidating other major holdings, including the sale of its Nvidia stake for $5.8 billion and the divestment of $12.73 billion in T-Mobile shares. - While profitable, the quarterly result fell significantly below consensus, with the reported net income being about one-third of the ¥857 billion that analysts had, on average, forecasted. - Chief Financial Officer Yoshimitsu Goto noted that the gains were not solely from OpenAI but also from other core AI holdings, specifically highlighting the performance of semiconductor designer Arm.
