SoftBank turned a corner. All eyes are now on its big AI bets.

Core Viewpoint - SoftBank has posted its first annual profit in four years, with a net income of 1.15 trillion yen ($7.8 billion) for the year ended March, overcoming a previous loss of $1.5 billion, signaling a potential turnaround for the company as it invests heavily in AI [1][2][3]. Financial Performance - The fourth quarter saw a 124% year-on-year increase in quarterly profit, driven by a significant rise in Alibaba shares, which have increased over 55% this year, and profits from its telecom unit, including T-Mobile [2]. - The overall profit recovery provides relief for CEO Masayoshi Son, who has faced criticism for past losses, including a disastrous investment in WeWork and significant losses in the Vision Fund [3]. AI Investment Strategy - Masayoshi Son is heavily investing in AI, believing it will surpass human intelligence by 2035, and is making high-risk moves to achieve this vision [4]. - SoftBank has become a key backer of OpenAI, leading a $40 billion funding round and investing a total of $2.2 billion, viewing OpenAI as the closest partner to achieving artificial general intelligence [5]. - The company is also focusing on the necessary computing power for AI development, with Son serving as chairman of Stargate, a $500 billion infrastructure project in the US [6]. Broader AI Initiatives - In addition to OpenAI, SoftBank holds a majority stake in AI chip firm Arm and has established a new holding company, Robo HD, for its robotics investments [7]. - However, these investments come with risks, including legal challenges faced by OpenAI and uncertainties surrounding the Stargate project due to external factors like tariffs [8]. Market Concerns - There are concerns regarding the long-term demand for AI chips, as evidenced by Arm's decision not to provide full-year revenue guidance, leading to an 11% drop in its shares after earnings [9].