(Feb 12): SoftBank Group Corp sprang back to a quarterly profit after Masayoshi Son’s bet on OpenAI paid off in valuation gains, cementing the Japanese company’s position as an investment proxy for the ChatGPT creator.
The Tokyo-based company has invested more than US$30 billion ($37.87 billion) in OpenAI, accumulating an 11% stake as of December, and has been in talks to invest as much as US$30 billion more in a round that would value the start-up at about US$750 billion to US$830 billion. As of December, SoftBank’s investment gain on OpenAI stood at an estimated US$19.8 billion, the company said on Thursday.
OpenAI now represents one of SoftBank’s biggest holdings, alongside a roughly 90% stake in chip designer Arm Holdings plc. That’s tethered the Japanese company’s shares to ChatGPT’s relative performance against rivals Google’s Gemini and Anthropic’s Claude.
SoftBank is “the only real way to directly play OpenAI in today’s public markets”, BTIG analyst Jesse Sobelson wrote in a note ahead of Thursday’s earnings, estimating that the start-up represents 30% of SoftBank’s net asset value. “Next OpenAI capital raise could spur re-mark of SoftBank equity ownership” and serve as a catalyst, the note said. BTIG said it expects to receive or seek compensation from SoftBank for investment banking services in the next three months.
For the December quarter, SoftBank reported a net income of JPY248.59 billion (US$1.6 billion or $2.1 billion) in its fiscal third quarter, compared with the average analyst estimate of about JPY857 billion. It was the tech investor’s fourth straight quarterly profit — a first for SoftBank since 2021 — and came despite investment losses on share price drops in Coupang Inc.
SoftBank has also stepped up investments in other parts of the artificial intelligence ecosystem as founder Masayoshi Son seeks to play a bigger role in shaping future technology.
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Last month, the company signed a US$3 billion deal to buy private equity firm DigitalBridge Group Inc, whose portfolio includes digital infrastructure companies such as AIMS, AtlasEdge, DataBank, Switch and Vantage Data Centers. SoftBank, which announced the US$500 billion Stargate push alongside OpenAI, Oracle Corp and Abu Dhabi’s MGX to build data centres in the US, separately pursued a deal of around US$50 billion for data centre operator Switch, but the talks were halted earlier this year.
To finance some of that cost, SoftBank on Thursday said it divested more of its T-Mobile US Inc holding and increased the amount of its margin loan based on its mobile unit SoftBank Corp shares. The company has already unloaded its entire Nvidia Corp stake for US$5.8 billion and expanded a margin loan using its Arm shares.
The accelerating pace of investments, along with the sharp drop in the value of Arm shares at the end of last year, are heaping pressure on its creditworthiness, S&P Global Ratings warned last month.
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SoftBank “faces more than US$20 billion of refinancing in 2026, with its bonds trading wide due to supply risk”, Bloomberg Intelligence analyst Sharon Chen wrote in a note. “It can manage loan-to-value and raise funds by selling assets, but this would further weaken its portfolio liquidity.”
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