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Vision Fund Faces Challenges as Investment Gains Decline

SoftBank's Vision Fund segment reported a pretax loss of ¥115.02 billion ($777.7 million) for the fiscal year ending March 2025, a significant reversal from the ¥128.2 billion profit recorded the previous year. The downturn is attributed to a 40% decrease in investment gains, totaling ¥434.9 billion, compared to ¥724.3 billion in the prior fiscal year. While the fund saw gains from investments in companies like China's Didi and South Korea's Coupang, these were offset by declines in other portfolio companies, including AutoStore.

In the fiscal fourth quarter (January–March 2025), the Vision Fund segment recorded a modest gain of ¥26.1 billion, aided by an increase in the valuation of ByteDance, the parent company of TikTok.

SoftBank Achieves Overall Profit Through Diversified Investments

Despite the Vision Fund's losses, SoftBank Group achieved an overall annual profit of ¥1.15 trillion ($7.78 billion) for the fiscal year, marking its first annual profit in four years. This turnaround was driven by strong performances in its telecommunications holdings, including T-Mobile US and Deutsche Telekom, as well as gains from mature investments in companies like Alibaba.

Strategic Shift Towards Artificial Intelligence

SoftBank is intensifying its focus on artificial intelligence (AI) as a core growth area. The company announced a $6.5 billion acquisition of Ampere Computing, a U.S.-based chip designer specializing in energy-efficient processors for AI and cloud computing. This acquisition complements SoftBank's existing ownership of Arm Holdings and aims to bolster its capabilities in AI infrastructure.

Additionally, SoftBank has committed up to $30 billion in investments in OpenAI and is spearheading the "Stargate" project—a $500 billion initiative to build AI data centers across the United States. However, the Stargate project has encountered delays due to concerns over potential increases in construction costs stemming from tariffs.

Outlook and Investor Considerations

While SoftBank's diversified investments have led to a return to profitability, the Vision Fund's performance highlights the volatility inherent in tech investments. The company's strategic pivot towards AI and infrastructure investments presents both opportunities and risks, especially amid global economic uncertainties. Investors will be closely monitoring how these initiatives impact SoftBank's financial health and market position in the coming years.

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