SoftBank's pivot to AI infrastructure
SoftBank, a major mobile service provider in Japan, is shifting its focus toward artificial intelligence and cloud computing as key areas for growth. During a recent call with investors, Chief Financial Officer Osamu Akiyama stated that SoftBank’s AI efforts have entered a phase where they now generate revenue. This development has prompted the company to reorganize its financial reporting structure to reflect the growing significance of AI and cloud operations within the Enterprise segment.
The shift is a result of rising demand for computing resources and services tied to artificial intelligence. These trends helped drive a 28% increase in operating income for the Enterprise division compared to the previous year. As AI plays an increasingly central role in the company’s future, SoftBank is adapting its business model to match the rapid evolution of the industry.
A bold new forecast
SoftBank has revised its cloud and AI revenue targets upward. The company now projects a 30% compound annual growth rate for cloud and AI revenue in the two-year period spanning FY2026 and FY2027. Akiyama pointed out that earlier expectations were set at a 15% growth rate, but current progress suggests the company is on track to exceed that original benchmark.
The CFO also spoke about balancing AI infrastructure investments with financial responsibility. While costs and depreciation are rising due to the reclassification of AI assets, SoftBank is maintaining its planned investments. Akiyama stressed that the company is pursuing growth opportunities in a strategic way while staying committed to its financial discipline.
Expanding into the neocloud market
To strengthen its market presence, SoftBank is moving into the neocloud sector, a relatively new segment in the tech industry. In the latest quarter, the company allocated $1 billion to its SB Energy division to launch the new initiative. Part of this investment will be sold in the next fiscal period, potentially bringing in a $1.5 billion profit. This action fits into SoftBank’s broader strategy of expanding its AI and cloud technology footprint.
The company is using its AI infrastructure as a means to compete with major global cloud service providers. Earlier this year, SoftBank introduced its AI Data Center GPU Cloud, a sovereign cloud service designed to challenge industry leaders. While the beta version is already in use, the full commercial launch is not expected until 2026. Initially, the service will be limited to internal use across SoftBank’s divisions before being made available to external customers.
Akiyama further explained how the company’s AI infrastructure spending is progressing according to plan for the full fiscal year, despite low capital expenditures recorded in the first quarter. The CFO also outlined SoftBank’s broader investment strategy, which includes remaining open to new opportunities while ensuring financial stability. He emphasized the company’s willingness to explore strategic growth areas.
SoftBank’s AI expansion is part of its long-term vision to leverage emerging technologies for broader societal benefits. This strategy is reflected in the company's 'Activate AI for Society' initiative, which aims to create a positive impact through AI innovation. With the beta version of its AI cloud service already active, the company is preparing for a wider rollout that will position it as a strong contender in the competitive tech landscape.