SoftBank’s Earnings Set to Reflect OpenAI Gains as Funding Questions Loom

TOKYO — Feb 10 (GeokHub) SoftBank Group is expected to report a solid profit from its investment in OpenAI when it releases quarterly earnings on Thursday, even as investors focus on how the Japanese conglomerate plans to finance its rapidly expanding push into artificial intelligence.

The company’s heavy exposure to the ChatGPT maker has made it increasingly viewed by markets as a publicly traded stand-in for OpenAI, intensifying concerns about concentration risk and the long-term financial burden of continued investment.

Deepening Bet on OpenAI

SoftBank invested more than $30 billion in OpenAI last year, lifting its ownership stake to roughly 11%, and is currently in discussions to commit up to an additional $30 billion in the company’s latest funding round.

While OpenAI has secured a series of multi-billion-dollar deals, it continues to operate at a loss, raising investor unease over how future spending commitments will be funded — and how much SoftBank may be asked to contribute.

Analysts say SoftBank shareholders are now closely tied to OpenAI’s fortunes, as the investment firm doubles down on a familiar strategy favored by founder and CEO Masayoshi Son: making large, high-conviction bets on fast-growing companies that have yet to turn a profit.

Paper Gains, Real Risks

SoftBank is expected to book an investment gain of about $4.45 billion from a $22.5 billion OpenAI funding tranche completed in December, according to analyst estimates.

Forecasts for quarterly net income vary widely, ranging from a gain of more than 1 trillion yen to a loss of nearly 500 billion yen, highlighting volatility in SoftBank’s earnings outlook.

Although OpenAI’s valuation has climbed with each funding round, analysts caution that these gains remain unrealized and could shift as competition in the AI sector intensifies.

Financing Strategy Under Scrutiny

Investors are closely watching how SoftBank will fund future OpenAI investments after selling some of its most liquid assets. In recent months, the company exited its holdings in Nvidia and reduced its stake in a major U.S. telecom operator, raising billions of dollars.

SoftBank has also increased borrowing, pushing leverage higher. Even under optimistic valuation assumptions for OpenAI, analysts say the company’s leverage would only modestly decline.

Despite being rated below investment grade, SoftBank retains financial flexibility. It still has borrowing capacity tied to its stake in chip designer Arm Holdings and held trillions of yen in cash as of its last reported quarter.

AI Competition Intensifies

Demand from outside investors for OpenAI exposure remains strong, with major technology companies in talks to join the latest funding round. Still, analysts note that competition among AI firms has accelerated, narrowing the gap between OpenAI and its rivals.

What was once seen as clear dominance is now viewed as a crowded and capital-intensive race, leaving SoftBank under growing pressure to balance ambition with financial discipline.