SoftBank Quarterly Net Profit Unexpectedly Beats Estimates by Six Times, OpenAI Holding Cumulative Floating Profit Reaches $45 Billion

Financial reports show that the Vision Fund recorded gains of approximately $46 billion this fiscal year, almost entirely due to the surge in valuation of its OpenAI holdings. By the end of March, the value of SoftBank's investment in OpenAI had climbed to $79.6 billion, representing a cumulative floating profit of $45 billion over the initial investment.

According to public disclosures, the majority of the $34.6 billion previously invested by SoftBank was committed when OpenAI was valued at $260 billion, whereas OpenAI's valuation has now soared to approximately $852 billion, representing a return on investment of over 129%.

SoftBank has redeployed nearly all funds recovered from the sale of assets such as T-Mobile into the AI sector. This April, SoftBank completed borrowings totaling $20 billion, with the proceeds primarily intended for follow-on investments in OpenAI.

Pursuant to previous commitments, SoftBank will inject capital in three phases through 2026, raising its cumulative investment to approximately $64.6 billion and further increasing its stake from 11% to about 13%.

In the intense race for AI computing power, SoftBank also plans to invest $16 billion in the Stargate data center project, a collaboration between OpenAI and Oracle, and allocate an additional $9 billion for acquiring strategic assets such as ABB Robotics and DigitalBridge.

Shortly after OpenAI completed its latest funding round, S&P Global Ratings revised SoftBank's credit outlook to negative. The agency cited concerns that SoftBank's asset liquidity, portfolio quality, and financial capacity could deteriorate due to the massive additional investment in OpenAI, signaling that the substantial capital deployment is straining the company's credit profile and liquidity.

According to reports, SoftBank initially planned to use its OpenAI equity as collateral for a margin loan. However, due to hesitation from creditors, it was forced to scale back the financing, suggesting that capital markets are losing confidence in SoftBank’s method of raising debt against equity.

Meanwhile, some of SoftBank’s listed holdings significantly underperformed OpenAI during the same period. Core positions like Coupang Inc. and Grab Holdings Ltd. saw their stock prices decline during the quarter, dragging down earnings. Arm remains perhaps the only bright spot; the SoftBank-owned UK chip designer saw its quarterly revenue grow 20% to $1.49 billion, as demand for AI data centers partially offset structural challenges from a weak smartphone market.

Richard Kaye, co-head of Japanese equity strategy at Comgest Asset Management, previously stated that for any global tech giant, it is extremely difficult to diversify bets across multiple competing players.

What the market will continue to watch is whether the $45 billion in paper gains—as SoftBank, the market's "notorious gambler," places most of its chips on the AI table—marks the beginning of a new phase of AI wealth accumulation or the end of this current AI gamble.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.