Gambling hasn’t always worked out for SoftBank’s Masayoshi Son. However, as the Japanese billionaire observes a positive shift in his technology empire, he hopes to successfully navigate a significant wager on AI.
On Tuesday, SoftBank, which has established itself as a crucial supporter of Sam Altman’s OpenAI, reported its first annual profit in four years. The company’s net income reached 1.15 trillion yen ($7.8 billion) for the fiscal year ending in March, recovering from a $1.5 billion loss the previous year.
The overall profit was bolstered by fourth-quarter gains, with a remarkable 124% year-on-year increase in quarterly profits driven by its longstanding investment in Alibaba shares — these shares have surged over 55% this year — as well as profits from its telecom unit, including T-Mobile.
This turnaround will provide a sense of relief for CEO Masa, who spent much of the past decade apologizing for his missteps and losses. A troubling investment in WeWork resulted in an apology, while significant losses in his Vision Fund prompted Son to express his embarrassment and remorse in 2022.
But with SoftBank’s fortunes on the upswing, Son likely feels more secure as he goes all-in on AI.
Son’s Largest Bet is Now Active
Few have advocated for AI as passionately as Son. The SoftBank CEO claimed last year that he anticipates AI will be 10,000 times more intelligent than the human brain by 2035, eventually evolving into a form of “super wisdom” beneficial for all humanity. However, achieving this vision hinges on his ability to execute some high-risk strategies.
SoftBank’s increasing partnership with OpenAI stands out as the most significant. Earlier this year, the Japanese firm took the lead in a $40 billion funding round for the creators of ChatGPT, following a previous investment of $2.2 billion in the company last year.
According to SoftBank’s filings from Tuesday, the company is prepared to invest this substantial amount because it considers OpenAI to be “the partner closest to achieving artificial general intelligence,” the point at which AI can perform any intellectual task that humans currently can. Moreover, SoftBank is relying on OpenAI to provide the “massive computing power” required to develop and train more advanced AI models, contributing to Son’s role as chairman of Stargate, a $500 billion project announced in January aimed at establishing critical infrastructure in the US.
These investments in OpenAI are accompanied by similar ventures in AI elsewhere. One prominent example is SoftBank’s majority stake in the AI chip company Arm. Furthermore, the establishment of a new holding company named Robo HD in January, dedicated to its robotics-related investments, indicates another strategic move.
However, these ventures are not without their risks. OpenAI currently faces legal issues with Elon Musk concerning its corporate structure and has encountered challenges with some of its newer models. For instance, last month, OpenAI had to retract an update that prompted its AI to exhibit “sycophantic” behavior.
Concerns also loom over the Stargate initiative. A Bloomberg report on Monday indicated that SoftBank’s plans to invest in the infrastructure project have decelerated, as uncertainties stemming from Donald Trump’s tariff proposals have complicated talks with potential lenders.
Moreover, there are ongoing questions regarding the long-term demand for AI chips. Arm did not provide full-year revenue guidance when it reported earnings last week, causing its shares to drop 11% in after-hours trading.
For Son, effectively managing these investments will be crucial in maintaining his leading position.
