SoftBank’s Strategic Pivot: A Triple Move to Cement Its AI Leadership

SoftBank JP3436100006

SoftBank Group Corp. is executing a synchronized strategic shift, channeling its focus and capital toward the core layers of the artificial intelligence revolution. The conglomerate announced a trio of significant moves concurrently: a stock split for its U.S.-listed shares, a monumental investment in OpenAI, and a major acquisition in digital infrastructure. Collectively, these actions signal a deliberate repositioning from semiconductor exposure toward AI software and the critical data center assets that power it.

The company is fundamentally reshaping its investment holdings to align with its revised AI thesis. This restructuring involves both substantial new commitments and strategic divestments.

• Historic OpenAI Stake: SoftBank has finalized an investment in OpenAI totaling $41 billion, elevating its ownership stake in the AI pioneer to approximately 11%.
• DigitalBridge Acquisition: An agreement is in place to acquire DigitalBridge Group in full for about $4 billion in cash, at a price of $16 per share. This purchase aims to secure vital data center infrastructure.
• Funding the Shift: To partially finance these moves, the group has sold down significant holdings of Nvidia shares over recent quarters. The value of these disposals at the time of sale was roughly $5.8 billion.

Market reaction has been initially positive, with SoftBank's shares in Tokyo advancing approximately 2.5% ahead of the announcements, while its U.S.-traded ADRs closed slightly higher.

Enhancing Accessibility and Targeting AI's Core

At the heart of today's announcements is a plan to improve stock liquidity while doubling down on the software and infrastructure "stack" of AI, rather than the hardware layer.

1. Stock Split Implementation: A 4-for-1 split for its American Depositary Receipts (ADRs) takes effect tomorrow. The primary objective is to make the shares more accessible to individual investors following a period of significant share price appreciation.
2. Securing Computational Power: The takeover of DigitalBridge is a direct play on infrastructure, providing ownership of essential data center assets. These facilities are required to handle the immense computational demands of running advanced AI models like those from OpenAI.
3. A Strategic Reallocation: The pivot from selling Nvidia shares to acquiring a larger piece of OpenAI represents a calculated bet. It reflects a view that in the next stage of the AI cycle, greater value will be created at the model and infrastructure levels than in chip manufacturing alone.

Key metrics underscore the context for this aggressive shift:
* The total return for SoftBank's stock over the past 12 months stands near 103%.
* Institutional investors currently hold about 40% of the company's shares.

Balancing High-Growth Bets with Steady Returns

While the scale of these moves evokes memories of SoftBank's historic internet-era investments, the current strategy is notably paired with a reliable source of stability. The group's Japanese telecommunications subsidiary continues to provide a steadying anchor, confirming a dividend of 4.30 yen per share payable in June. This translates to a dividend yield of roughly 4.0%, supported by a payout ratio of approximately 74%. This structure allows SoftBank to blend stable cash flows from telecoms with high-growth, strategic AI investments at the holding company level.

Near-Term Catalysts and Mid-Term Execution

Attention now turns to the immediate and upcoming milestones. Trading on a split-adjusted basis begins tomorrow, which could stimulate increased trading activity. The next major event for investors will be the release of Q3 financial results on February 12. Management is expected to provide greater detail on the integration of DigitalBridge and the earnings outlook for the expanded OpenAI stake.

With the stock trading close to its 52-week high, the split may provide a psychological boost. For the medium-term trajectory, the critical factors will be whether the DigitalBridge acquisition can quickly contribute to earnings despite the high leverage typical in the infrastructure sector, and if the anticipated synergies between this infrastructure and the OpenAI investment begin to materialize as projected.