This article first appeared on GuruFocus.
SoftBank Group's (SOBKY) Japanese telecom arm is taking its AI ambitions off the whiteboard and into the market. Partnering with OpenAI, the company plans to roll out new AI-powered services for Japanese enterprises next yearan early push to convert hype into actual revenue. SoftBank Corp. President Junichi Miyakawa said he's already seen test versions that could completely change how fast businesses operate, highlighting features like voice recognition that reduce the need for manual typing. The announcement coincided with the launch of SB OAI Japan, a joint venture between SoftBank and OpenAI, which Miyakawa described as a seed of growth to look forward to next year and beyond.
Investors, however, weren't celebrating. Shares of SoftBank Group plunged 10%, the steepest drop since April, as markets reacted to the conglomerate's heavy exposure to AI giants OpenAI and Nvidia (NASDAQ:NVDA). The telecom subsidiary SoftBank Corp. fell a modest 0.5%, outperforming broader Tokyo indices after posting a 26% jump in net income to 203.4 billion ($1.3 billion). Quarterly revenue rose 8%, fueled by robust growth in its distribution and subscription businesses. For founder Masayoshi Son, the telecom arm remains a vital cash engineone that continues to bankroll his global AI and tech ambitions.
Looking ahead, Miyakawa said the company will offer free access to its computing infrastructure to nurture Japan's AI startup ecosystem, while also working to secure Nvidia's upcoming Rubin chips to meet soaring demand. The effort mirrors SoftBank's history of localizing global tech successes, from telecom ventures to payments. Its PayPay unit, now preparing for a US IPO, represents the next stage of that playbookthough SEC reviews have been delayed by the US government shutdown. Miyakawa remains confident, noting that PayPay could evolve into an extremely valuable company over the long term.