SoftBank Returns to Profitability Amid AI Push, Despite Mixed Investment Results

SoftBank Group Corp. has staged a remarkable financial comeback, posting a quarterly net profit of 517 billion yen ($3.49 billion) for the January-March period, more than doubling the 231 billion yen profit recorded in the same quarter last year and defying analyst expectations of a 26.9 billion yen loss.

The Japanese conglomerate’s strong performance has enabled it to book its first annual profit in four years, with a net profit of 1.15 trillion yen ($7.8 billion) for the fiscal year ended March 31, according to financial results released Tuesday.

“The Vision Fund business has finally turned to a profit on a full-year basis,” SoftBank founder and CEO Masayoshi Son said during the earnings presentation, as reported by The Japan Times. The company’s investment arm had previously suffered significant losses during the tech market downturn.

SoftBank’s telecommunications holdings and later-stage startup investments were key drivers behind the positive results. Vision Fund 1, which focuses on more mature startups, recorded a substantial gain of 940 billion yen, bolstered by its stakes in companies like ByteDance and e-commerce firm Coupang.

However, the company’s investment strategy continues to show mixed results. Vision Fund 2, which targets earlier-stage startups, posted a loss of 526 billion yen, highlighting the ongoing challenges in the venture capital landscape.

The group’s Indian investments have particularly struggled, with the company marking down the valuation of food delivery platform Swiggy and ride-hailing service Ola, according to MoneyControl. These write-downs underscore the difficulties SoftBank faces in certain emerging markets despite its overall recovery.

SoftBank’s financial resurgence comes as the company pivots toward artificial intelligence investments. “AI will be the most powerful technology in human history,” Son declared, as quoted by Bloomberg. The company has been increasing its focus on AI-related ventures, viewing the technology as central to its future growth strategy.

However, SoftBank’s ambitious AI plans have encountered some roadblocks. A planned $100 billion data center project with OpenAI has reportedly been delayed due to concerns about potential U.S. tariffs on Chinese equipment, the New York Post reported, citing sources familiar with the matter.

Despite these challenges, investors have responded positively to SoftBank’s improved financial performance. The company’s shares rose following the earnings announcement, with Proactive Investors noting that the better-than-expected results boosted market confidence.

SoftBank’s return to profitability marks a significant milestone after years of financial turbulence. “This is the first time in four years that we’ve been able to report a profit,” CFO Yoshimitsu Goto said during the earnings call, as reported by Morningstar.

As SoftBank continues its transition toward AI-focused investments, market observers will be watching closely to see if Son’s latest vision can deliver sustainable returns after years of volatile performance.