OPENAI
The gains are real. So is the invoice.
SoftBank is expected to report a strong quarterly profit this week, helped by its growing investment in OpenAI.
Analysts expect the Japanese tech investor to post a net profit of around 236 billion yen, or $1.5 billion, for the January to March quarter.
A big reason is OpenAI’s rising valuation, which reportedly reached $840 billion after its latest funding round.
TD Cowen estimates SoftBank’s 11% stake in OpenAI was worth about $80 billion at the end of March, up from $54.4 billion at the end of December.
SoftBank is also expected to invest another $30 billion in OpenAI in 2026.
If OpenAI goes public in late 2026 or early 2027, that could bring further gains.
But analysts are now asking how much more SoftBank can afford.
The main points:
SoftBank’s OpenAI stake has grown sharply in value.
Analysts are worried about the debt needed to keep funding it.
Investors are still backing SoftBank’s AI strategy, at least for now.
Debt is now part of the story
The company has been borrowing more to fund its AI plans. In March, it secured a $40 billion bridge loan for its OpenAI investment.
S&P Global Ratings also changed SoftBank’s credit outlook to negative, warning that its financial flexibility could weaken.
There are also concerns about how much of SoftBank’s future is now tied to one private company.
Some analysts have compared the risk to WeWork, another major SoftBank-backed company that later collapsed.
Still, investors seem confident for now. SoftBank’s shares have nearly doubled since the start of April and are close to their record high.
That balance sheet is SWEATING.- MG