SoftBank profit doubles as AI demand boosts chip sales and startups
SoftBank reported a 124% jump in quarterly profit on resilient AI demand that's supporting startup valuations and chip unit sales, a boost to its aggressive data center investment plans.
The Tokyo-based company reported net income of ¥517.18 billion ($3.5 billion) in its fiscal fourth quarter. It was helped by the Vision Fund, which swung to a profit of ¥26.1 billion mainly on a surge in the value of TikTok owner ByteDance and its strong international sales.
The earnings come at a critical juncture for SoftBank as it plans to invest $30 billion in OpenAI while leading a $100 billion foray into building AI hardware in the United States. Maintaining a healthy cash flow and balance sheet is key to securing the billions of dollars needed at minimum cost.
They also underscore SoftBank's exposure to the volatile startup market after years of investments through the Vision Fund into hundreds of tech companies. Online video darling TikTok is driving ByteDance's revenue and its valuation, while SoftBank was also helped by share price increases at Didi Global and Auto1 Group.
That outweighed declines at baby-products retailer BrainBees Solutions and stock price falls at other publicly listed Indian portfolio companies, such as food-delivery app Swiggy and e-scooter maker Ola Electric Mobility.
Global investment in AI computing helped boost sales at SoftBank's chip unit Arm Holdings. For the year ended March, SoftBank earned ¥1.15 trillion in net income, springing back from a loss of about ¥228 billion in the previous year.
But growing tech protectionism and the prospect of further U.S. tariffs are weighing on SoftBank's ambitions to become a leader in global AI.
"Uncertainty is growing and it's becoming harder to see the landscape ahead,' Chief Financial Officer Yoshimitsu Goto said during an earnings conference. "But SoftBank has not changed course for 44 years. We are not changing now.'
SoftBank founder Masayoshi Son and OpenAI co-founder Sam Altman unveiled the U.S.-based Stargate project in January with promises to deploy $100 billion into data centers and other AI infrastructure — and plans to raise that to above $500 billion over time.
But that bid to place SoftBank among the leaders in global AI has been stymied as debt investors and bankers reassess the value of data centers. SoftBank has yet to begin detailed discussions on how the large-scale data center rollout will be financed.
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