SoftBank’s Strategic Pivot: Capital Reallocation Fuels AI Ambitions

SoftBank JP3436100006

SoftBank Group Corp. is navigating a period of significant strategic transition, marked by volatile share prices and a decisive shift of capital toward artificial intelligence infrastructure. Investors are weighing substantial new investments, portfolio divestments, and technological milestones to assess the clarity of the conglomerate's future direction.

The company's shares experienced notable pressure last week. On Thursday, the stock listed in Tokyo declined by 7.59%, closing at 4,300 yen. In the subsequent session, it saw a further decrease of 0.86%, ending at 4,263 yen.

In contrast, SoftBank's American Depositary Receipts (SFTBY), traded in the United States, have demonstrated greater stability. Recent data places the ADRs in a range between approximately $56.52 and $59.55, a valuation that corrects earlier reports of significantly lower levels and trades notably above the parity level implied by the recent drop in the Japanese shares.

Billion-Dollar AI Infrastructure Partnership

A central element of SoftBank's strategy is an expanded collaboration with OpenAI. The two entities are jointly committing $1 billion to SB Energy, SoftBank's renewable energy subsidiary.

Key details of this partnership include:
* Joint Funding: The investment is split evenly, with SoftBank and OpenAI each contributing $500 million.
* Project Scope: Capital is earmarked for a new 1.2-gigawatt data center project located in Milam County, Texas.
* Operational Integration: As part of the deal, SB Energy will become a major customer of OpenAI, incorporating ChatGPT and OpenAI's APIs into its internal operations.

This initiative forms part of the broader "Stargate" project, a $500 billion endeavor aimed at building the energy and computing capacity required for next-generation AI. The first facilities are scheduled to come online starting in 2026.

Unlocking Capital from Legacy Holdings

Concurrently with its U.S. expansion, SoftBank is methodically reducing certain holdings, particularly in India. Through the investment vehicle SVF II Ostrich, the group has further decreased its stake in Ola Electric, an electric vehicle manufacturer.

Between September 2025 and January 5, 2026, SoftBank sold approximately 94.6 million shares, equivalent to a 2.15% stake, via the market. This reduced its ownership from 15.68% to 13.53%.

This divestment occurs as Ola Electric shows signs of operational recovery. After previous setbacks, the company's market share in India increased to around 9.3% in December 2025, up from 7.2% in November. This marks the second major reduction within six months, highlighting SoftBank's focus on freeing up capital from its Vision Fund portfolio to redeploy toward new AI-centric projects.

5G-Advanced Breakthrough in Domestic Market

Beyond investment moves, SoftBank has reported technological progress in its core telecommunications business. In early January 2026, the company announced successful tests of 5G-Advanced technology in Tokyo, conducted in collaboration with Ericsson and Qualcomm.

The trials demonstrated a reduction in latency of approximately 90%. This technical advancement is considered crucial for supporting time-sensitive commercial applications, including real-time AI processing and Extended Reality (XR).

Strategic Outlook: High Stakes, Defined Focus

The market is balancing the short-term financial impact of the "Stargate" investment wave against the long-term potential of a deepened commitment to AI infrastructure. Critical factors for the coming quarters will include:
* Progress on constructing the Texas data centers.
* Further portfolio reallocations from Vision Fund assets.
* The successful monetization of new 5G-Advanced capabilities within SoftBank's domestic Japanese market.

Key Data Summary:
* Tokyo Share Price (Latest Close): 4,263 yen
* US ADR Trading Range: $56.52 - $59.55
* SoftBank's AI Investment: $500 million into SB Energy (part of a $1B joint deal)
* Ola Electric Stake: Now 13.53% following recent sales
* Ola Electric Market Share (Dec 2025): Approximately 9.3%