SoftBank Dumps Alibaba Shares to Pursue AI Investments

SoftBank Group has sold its entire stake in Alibaba Group Holding and is channeling those funds towards U.K. chip designer Arm Holdings, in what the Japanese company describes as “a shift to an AI-centric portfolio.”

SoftBank Zeros Its Alibaba Holdings 

The move comes after SoftBank reported a 959.9 billion yen ($6.1 billion) investment loss in Alibaba. 

In an earnings call Monday, SoftBank said it made a loss of 227.6 billion yen ($1.46 billion) in the fiscal year through March, at the backdrop of its Alibaba loss.

The report marked the third straight year of losses for SoftBank, although less than the 970.1 billion yen ($6.2 billion) recorded in the previous year. “Compared with fiscal 2022, we have made good progress,” said Yoshimitsu Goto, SoftBank’s CFO.

SoftBank Says Arm is Core to Its AI Shift

Goto admitted the shift from Alibaba to Arm Holdings in the call, saying Alibaba, which previously accounted for 48% of SoftBank’s net asset value, now represents “almost zero” of the company’s assets. 

“This shows a shift to an AI-centric portfolio. Arm is core to our shift to AI and the assets held by us and the SoftBank Vision Fund,” Goto said in the call. 

The UK chip company now represents 45% of SoftBank’s assets and 29% of SoftBank’s Vision Funds. SoftBank also reportedly owns a 90% stake in Arm. 

The shift also comes as Arm plans to begin making its own AI chips, amid global demand for the chips. The company said the new venture could cost hundreds of billions of yen, and expects to release first batch of its chips in 2025, Cryptopolitan reported.

Arm reportedly has the leading share of smartphone processor architecture, with approximately 90% market share. The company’s stock price has been up over 84% since its listing on the Nasdaq Composite in September.

Other than its investment in Arm, SoftBank had also announced a plan to invest 150 billion yen ($960 million) by June 2025 towards developing AI technologies and improving the company’s computing power.