AI Bets Lift SoftBank to Record Profit While Alibaba Absorbs Heavy Costs

SoftBank Group posted its strongest annual result in years after gains from artificial-intelligence holdings outweighed losses elsewhere, while Alibaba Group reported sharply lower core profit after accelerating spending on the same technology.

The Tokyo-based investor recorded a net profit of 5 trillion yen, or about $32 billion, for the fiscal year ended March, nearly five times the 1.15 trillion yen earned the prior year, according to its statement. Revenue rose 8 percent to 7.8 trillion yen. The Vision Fund alone contributed a $46 billion gain, almost all of it from the rise in value of its OpenAI stake. SoftBank has already put more than $30 billion into the AI company and has committed to reach $60 billion for roughly 13 percent ownership.

OpenAI’s March funding round valued the firm at $852 billion. In the final quarter, the Vision Fund booked about $20 billion in gains, nearly all from that holding, even as other positions such as Coupang, DiDi Global and Klarna declined. SoftBank sold portions of its T-Mobile and Nvidia stakes, generating 218.1 billion yen in realized gains, yet still recorded an investment-income loss outside the Vision Fund once currency and expense adjustments were applied.

Alibaba, by contrast, saw its adjusted EBITA fall 84 percent year over year to 5.1 billion yuan, or $751 million, in the March quarter. The company attributed the drop to continued outlays for AI semiconductors, data centers and its Qwen model family. Its cloud unit nevertheless expanded 38 percent to 41.6 billion yuan, with AI-related revenue reaching 9 billion yuan and segment EBITA rising 57 percent. Quick-commerce revenue jumped 57 percent, helping overall China e-commerce revenue grow 6 percent despite a 40 percent drop in that segment’s adjusted EBITA.

SoftBank’s portfolio also includes stakes in Nvidia, Deutsche Telekom and Arm, plus the humanoid robot Pepper. It recently launched a battery business aimed at meeting electricity demand from AI data centers and is developing lightweight aircraft-wing material with Toppan for commercial use in about three years. Alibaba’s U.S.-listed shares fell as much as 4 percent on the day before closing down about 1.3 percent.

S&P Global Ratings changed its outlook on SoftBank from stable to negative in March, citing the concentration of its OpenAI commitment and potential pressure on liquidity. SoftBank’s chief financial officer noted a 3.5 trillion yen cash position that covers more than two years of bond maturities. The company does not issue earnings forecasts.