SoftBank Posts Fourth Straight Quarterly Profit on OpenAI Gains
Japan’s SoftBank Group reported its fourth consecutive quarterly profit, driven largely by the rising valuation of its investment in OpenAI. At the same time, the company increased its borrowing as it deepened its exposure to the rapidly expanding artificial intelligence sector.
For the October–December quarter, SoftBank posted a net profit of 248.6 billion yen ($1.62 billion), compared with a net loss of 369 billion yen during the same period a year earlier. The turnaround reflects strong gains linked to its stake in the maker of ChatGPT.
OpenAI Investment Boosts Earnings
SoftBank’s earnings have benefited significantly from the higher valuation of OpenAI. However, some investors remain cautious about the group’s growing exposure to a single AI company.
According to data compiled by LSEG, analysts had projected quarterly net income ranging from a gain of 1.1 trillion yen to a loss of 480 billion yen, highlighting the wide expectations ahead of the results.
Masayoshi Son’s conglomerate has invested more than $30 billion in OpenAI, building an estimated 11% stake. The move represents a bold strategy to position SoftBank as a key backer in the race to dominate large language model development.
OpenAI is reportedly seeking an additional $100 billion in funding, with SoftBank, Amazon, and Nvidia named among potential investors. The new round could value the company at approximately $830 billion.
SoftBank expects to record a total investment gain of $19.8 billion from its OpenAI stake as of the end of December.
Debt Rises as SoftBank Funds AI Expansion
To finance its aggressive AI investments, SoftBank has relied on asset sales, bond issuances, and loans backed by key holdings, including chip designer Arm.
The OpenAI stake is held within Vision Fund 2, of which 17% is directly owned by CEO Masayoshi Son. SoftBank has also reshaped its portfolio by exiting its Nvidia position and selling part of its T-Mobile stake for $12.7 billion between June and December last year.
The company expanded a margin loan secured by Arm shares to $20 billion, up from $13.5 billion previously, and utilized the remaining borrowing capacity. Additionally, borrowings against shares in its domestic telecom unit, SoftBank Corp, increased to 1.2 trillion yen from 800 billion yen.
As a result, SoftBank’s loan-to-value ratio rose to 20.6% at the end of December, compared with 16.5% three months earlier. Its cash reserves declined to 3.8 trillion yen during the same period.
AI Competition Intensifies
While OpenAI was once widely viewed as the dominant player in large language models, it now faces rising costs and growing competition from major technology firms such as Alphabet. At the same time, OpenAI is reportedly preparing for a potential initial public offering that could rank among the largest IPOs ever.
SoftBank’s shares closed 2.4% higher in a flat market before the earnings announcement, reflecting investor optimism around its AI-driven strategy.
