SoftBank Profits Surge on $25bn Gain for OpenAI Stake

SoftBank Group has reported a staggering surge in quarterly profits, driven primarily by a massive $25 billion unrealized gain on its stake in OpenAI. The Japanese investment conglomerate posted a net income of 1.83 trillion yen ($11.6 billion) for the fourth quarter of fiscal year 2025, vastly outpacing analyst expectations that had averaged just 236 billion yen.

The results, released on May 13, mark the fifth consecutive profitable quarter for SoftBank and underscore the transformative impact of Masayoshi Son's high-stakes bet on artificial intelligence. According to TradingKey, the cumulative floating profit from SoftBank's OpenAI holding has now reached approximately $45 billion.

OpenAI Investment Drives SoftBank Quarterly Profit

SoftBank's earnings have become increasingly tied to the valuation of OpenAI, the maker of ChatGPT. The company has invested more than $30 billion in the AI firm, building a shareholding of around 11%. Reuters reports that SoftBank is in talks to invest an additional $30 billion in OpenAI's latest funding round.

The Vision Fund, SoftBank's primary investment vehicle, recognized approximately $46 billion in gains this fiscal year, primarily from OpenAI's valuation surge to $852 billion. This performance has erased prior losses from the fund's earlier bets on companies like WeWork and Uber.

"The reality for SoftBank shareholders at the moment is that their fortune is tied with OpenAI," said Rolf Bulk, head of semiconductor and infrastructure research at Futurum Equities, as quoted by Reuters. "Even if they do another $50 billion round, they are going to require more funding."

Funding Concerns and Credit Outlook Amid AI Spending Spree

While the OpenAI bet has paid off handsomely on paper, analysts are increasingly focused on how SoftBank will finance its continued AI spending spree. The company is increasing its total investment in OpenAI to $64.6 billion and allocating $16 billion to the Stargate data center project, a massive infrastructure initiative.

To fund these commitments, SoftBank has been monetizing assets and taking on more debt. The company has used more Arm Holdings shares as collateral for margin loans and raised borrowings against its domestic telecommunications unit. S&P Global Ratings recently revised SoftBank's credit outlook to negative, citing concerns about asset liquidity and financial capacity from the massive AI investments.

"SoftBank's earnings have been flattered by the rising valuation of its investment in ChatGPT-maker OpenAI, even as investors question the risk of overexposure to a single firm in the red-hot artificial intelligence sector," Reuters reported in a separate analysis.

Despite these concerns, SoftBank's domestic telecom unit, SoftBank Corp., continues to perform strongly. The subsidiary reported record revenue of 5.195 trillion yen for the first nine months of fiscal 2025, an 8% year-on-year increase, with operating income up 8% and net income up 11%.

The company's full-year forecast has been upwardly revised, with management expressing confidence in continued growth across all segments. However, the concentration risk remains a key point of debate among investors, as SoftBank is increasingly viewed as a publicly traded proxy for OpenAI.

SoftBank's net profit surge on its OpenAI stake has validated Masayoshi Son's aggressive AI strategy for now, but questions about sustainability and funding remain. As the AI race intensifies, the Japanese conglomerate's fortunes will likely remain tied to the volatile valuation of its most important investment.