SoftBank Group has returned to quarterly profitability, powered largely by a surge in the valuation of its OpenAI stake — a development that could redefine Masayoshi Son’s long-term investment narrative. The Tokyo-based conglomerate reported net income of ¥248.59 billion ($1.6 billion) for the fiscal third quarter, marking its fourth consecutive quarterly profit, the first such streak since 2021. While earnings fell short of consensus expectations of roughly ¥857 billion, the underlying driver was unmistakable: artificial intelligence.

SoftBank has invested approximately $34.6 billion in OpenAI, building an 11% stake as of December. The company estimates unrealized gains on that investment at $19.8 billion. Talks are ongoing regarding a potential additional commitment of up to $30 billion in a funding round that could value OpenAI between $750 billion and $830 billion, underscoring the scale of conviction behind the bet.

OpenAI as a Core Asset in SoftBank’s Portfolio

OpenAI now ranks among SoftBank’s most significant holdings, alongside its roughly 90% stake in Arm Holdings. Analysts increasingly view SoftBank as the most direct public-market proxy for exposure to OpenAI, with some estimating the AI startup represents nearly 30% of the group’s net asset value.

Chief Financial Officer Yoshimitsu Goto emphasized that the investment is grounded in close engagement with OpenAI’s management and deep insight into its technology and business model. While no final decision has been made regarding additional capital injections, SoftBank’s strategic alignment with OpenAI signals a shift from its earlier scattershot Vision Fund approach toward a more concentrated AI-centric strategy.

For investors in both Japan and the U.S., this pivot matters. SoftBank’s share price has become increasingly tethered to developments in generative AI, including competition between ChatGPT and rivals such as Google’s Gemini and Anthropic’s Claude. Any upward revaluation of OpenAI could trigger a corresponding re-rating of SoftBank equity.

Financing the AI Ambition

SoftBank’s renewed aggressiveness in AI-related acquisitions extends beyond OpenAI. Recent deals include a $6.5 billion purchase of Ampere Computing, a $5.4 billion acquisition of ABB’s robotics unit, and a $3 billion agreement to acquire DigitalBridge. The group is also part of the $500 billion Stargate initiative to build U.S. data centers alongside OpenAI, Oracle and Abu Dhabi’s MGX.

To fund these ambitions, SoftBank has sold additional T-Mobile shares and expanded margin loans backed by holdings in SoftBank Corp. and Arm. It has already exited its Nvidia position for $5.8 billion. The company’s loan-to-value ratio stands at 20.6%, below its self-imposed 25% ceiling, but rating agencies have flagged concerns about leverage and asset volatility.

The strategic question is whether Son’s high-conviction AI strategy represents disciplined capital allocation or a renewed appetite for balance-sheet risk.

Balancing Vision and Financial Discipline

Despite strong valuation gains, SoftBank’s earnings missed analyst expectations partly due to investment losses elsewhere, including share price declines in Coupang. This highlights the inherent volatility of a portfolio concentrated in high-growth technology assets.

Management insists liquidity remains sufficient to cover two years of bond repayments, signaling an effort to reassure bondholders and equity investors alike. Yet the scale of planned investments suggests that market confidence in AI valuations will be critical to maintaining financial flexibility.

Going forward, SoftBank’s performance will hinge on two intertwined variables: OpenAI’s competitive positioning in the generative AI race and the stability of global capital markets. If valuations continue climbing, SoftBank could emerge as one of the primary beneficiaries of the AI infrastructure cycle. If sentiment turns, leverage may amplify downside risk.