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SoftBank Posts Fourth Straight Profit on OpenAI Gains

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SoftBank Group reported its fourth consecutive quarterly profit, buoyed by gains from its investment in OpenAI, even as it increased borrowing to expand its exposure to artificial intelligence.

The company posted a net profit of 248.6 billion yen for the October–December quarter, compared with a net loss a year earlier. A significant portion of the improvement came from the rising valuation of its OpenAI stake, which SoftBank said generated a total investment gain of nearly $20 billion by the end of December.

Founder and CEO Masayoshi Son has committed more than $30 billion to OpenAI, building an ownership stake of around 11% through Vision Fund 2. OpenAI is reportedly seeking an additional $100 billion in funding at a higher valuation, with prospective investors including Amazon and Nvidia.

To finance its AI strategy, SoftBank has relied on asset sales, bond issuance and loans backed by holdings such as chip designer Arm. It has also reduced stakes in companies including T-Mobile and expanded margin loans tied to its Arm and domestic telecom shares. The company’s loan-to-value ratio rose to 20.6% at the end of December, while its cash reserves declined.

As SoftBank deepens its investment in OpenAI, investors increasingly view the conglomerate as a proxy for the AI firm’s performance. While AI enthusiasm has lifted valuations, rising competition and escalating model development costs continue to shape market expectations.

SoftBank completes $41 billion investment in OpenAI, deepening bet on AI

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SoftBank Group said it has completed a $41 billion investment in OpenAI, marking one of the largest private funding rounds ever and giving the Japanese group an ownership stake of about 11% in the maker of ChatGPT.

The move underscores SoftBank CEO Masayoshi Son’s increasingly aggressive push into artificial intelligence, which he has described as an “all in” bet. Son is positioning SoftBank to capitalise on booming demand for AI computing power, spanning both software and the physical infrastructure that underpins advanced models.

SoftBank said it completed an additional $22.5 billion investment on Wednesday, following an earlier $7.5 billion injection in April. OpenAI also secured an expanded syndicated co-investment of $11 billion from other backers as part of the round. In March, SoftBank had agreed to invest up to $40 billion into a for-profit OpenAI subsidiary, with the funding structured through a mix of direct capital and syndicated investments.

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The transaction initially valued OpenAI at about $300 billion on a post-money basis. However, a subsequent secondary share sale completed in October pushed OpenAI’s valuation to roughly $500 billion, according to PitchBook data. CNBC first reported the completion of the latest investment earlier in the day.

The deal comes as artificial intelligence has become the central driver of global technology investment, reshaping corporate strategies and investor expectations. OpenAI has emerged as a key beneficiary of that shift, sitting at the heart of an industry-wide surge in AI spending.

OpenAI is also a core participant in “Stargate,” a large-scale, multi-year data centre initiative being developed alongside Oracle and other partners. The project aims to support next-generation AI models and is backed by major investors including SoftBank, further linking the group’s capital deployment to the infrastructure required for future AI growth.

SoftBank Shares Drop as Nvidia Stake Sale Reveals Deep AI Funding Demands

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SoftBank Group (9984.T) shares plunged as much as 10% on Wednesday, after the company’s $5.8 billion sale of its Nvidia stake raised questions about how it will finance its massive new AI investment spree, including major commitments to OpenAI.

The Japanese conglomerate is preparing to fund a $22.5 billion follow-on investment in OpenAI, alongside a $6.5 billion acquisition of chipmaker Ampere and a $5.4 billion purchase of ABB’s robotics division. Analysts estimate these moves bring SoftBank’s recent spending commitments to over $41 billion.

Despite holding 4.2 trillion yen ($27.9 billion) in cash at the end of September, CreditSights analyst Mary Pollock said the group’s short-term funding needs remain “substantial.” She added that SoftBank will likely need to “be proactive” in sourcing additional liquidity to sustain its AI push.

The selloff also reflects investor concerns that tech valuations are overstretched, even as SoftBank doubles down on its “all-in” strategy for artificial intelligence. Founder and CEO Masayoshi Son, long known for his high-risk investing style, remains confident that AI will define the next era of growth.

“The Nvidia position was large, liquid, and easy to monetize,” said Rolf Bulk, analyst at New Street Research, noting that SoftBank likely sees more upside by reallocating funds toward OpenAI.

SoftBank’s shares, which had quadrupled between April and October, closed the day down 3.46% after paring earlier losses. Nvidia and Arm Holdings, the chip designer SoftBank controls, also slipped around 3% overnight.

To fuel its aggressive investment agenda, SoftBank has raised funds through bond issuances and multi-billion-dollar loans, including an $8.5 billion facility for OpenAI and a $6.5 billion bridging loan for Ampere. CFO Yoshimitsu Goto said the group’s debt ratio of 16.5% is “actually a bit too safe,” signaling room for more leverage.

SoftBank’s Vision Fund CFO Navneet Govil defended the spending, arguing that today’s AI sector is fundamentally different from past speculative bubbles: “AI companies are generating meaningful revenues. The capital expenditure boom is driven by real demand.”