TOKYO โ The Japanese conglomerate SoftBank Group has achieved its first profit in four years, largely due to significant gains from its investment endeavors. However, the company has cautioned that the path forward is filled with uncertainties due to potential challenges arising from the geopolitical tensions between the U.S. and China, as well as other global issues.
For the fiscal year ending in March, SoftBankโs profits soared to 1.15 trillion yen ($7.8 billion), a dramatic improvement from the prior yearโs loss of 227.6 billion yen. The company also reported a 7% increase in annual revenue, reaching 7.2 trillion yen ($49 billion).
A key highlight of SoftBankโs strategy is its strong alliance with OpenAI, the organization responsible for ChatGPT. The Tokyo-based firm emphasized its commitment to advancing artificial intelligence-related technologies and continues to place significant investments in promising AI startups, including Glean and Helion from the U.S.
In addition, SoftBank recently announced its acquisition of Ampere, a U.S. semiconductor design company specializing in cloud and AI technologies. This $6.5 billion purchase is expected to be finalized in the latter half of this year.
The investment portfolio of SoftBank features significant stakes in companies like Alibaba, the Chinese e-commerce behemoth, and T-Mobile, a mobile communications firm. Both investments have appreciated in value over the recent period, contributing to improved financial outcomes for the firm.
Moreover, positive results from Armโa British semiconductor and software design companyโhave further boosted SoftBankโs earnings. The Japanese company holds a significant investment stake in Arm, which has seen profitable returns and royalties.
SoftBank Vision Funds have also provided the company with a substantial financial boost. The funds invest in various enterprises, including ByteDance, the entity behind TikTok, and PayPay, a highly popular mobile payment application in Japan.
Looking toward the future, SoftBank is planning an initial public offering for PayPay. Since its inception in 2018, PayPay has grown significantly and is now utilized by over 68 million users within Japan, a country with a population of about 125 million.