Key Points:
- SoftBank reported a fourth-quarter net profit of 1.829 trillion yen, easily beating market estimates.
- The massive profit came mostly from a $45 billion gain in the value of its OpenAI investment.
- Shares of the Japanese conglomerate still fell nearly 4% as investors worried about rising corporate debt.
- OpenAI faces growing competition from Google and Anthropic while missing internal revenue and user targets.
SoftBank Group shares took a steep dive on Thursday as investors grew nervous about the company placing massive bets on artificial intelligence. The Japanese technology giant released its fourth-quarter earnings report, showing incredible profits. However, the stellar financial numbers did little to calm the market. Investors worry that SoftBank now relies far too heavily on the success of a single startup, OpenAI.
During volatile trading on Thursday, SoftBank stock fell nearly 4% to settle at 5,725.0 yen. The stock actually started the morning session with solid gains before completely reversing course and heading downward. This sharp decline stood out even more because the broader Japanese stock market enjoyed a positive day. The benchmark Nikkei 225 index finished the trading session with a 0.2% gain.
The actual financial numbers looked spectacular on paper. SoftBank reported a net profit of 1.829 trillion yen, which equals roughly $11.61 billion, for the quarter ending on March 31. This massive result completely crushed Wall Street’s expectations. Analysts at Bloomberg originally estimated the company would only secure a 295.2 billion yen profit. The final number also more than tripled the 517.18 billion yen profit the company reported during the same period one year ago.
Despite the incredible bottom line, investors quickly realized where the money actually came from. A massive surge in OpenAI’s value accounted for almost the entire increase in profit. SoftBank poured money into the artificial intelligence startup, and that investment reached a staggering $79.6 billion by the end of March. This jump represents a cumulative gain of $45 billion on the initial money SoftBank invested.
This heavy exposure to a single startup completely unnerved many traditional investors. They worry about the extreme financial risks SoftBank took to fund these artificial intelligence dreams. The company borrowed massive amounts of money to buy its stake in the technology firm. SoftBank currently carries an outstanding balance of $17.5 billion on a massive $40 billion bridge loan it took out specifically to fund the OpenAI deal.
SoftBank fully committed itself to the maker of ChatGPT. The Japanese conglomerate poured about $30 billion into the startup during the 2025 fiscal year alone. To gather this mountain of cash, SoftBank executives made some difficult choices. They sold off several valuable holdings, including highly profitable shares in computer chip giant Nvidia. The company also took out massive new loans using its valuable stakes in chip designer Arm and its own mobile unit, SoftBank Corp, as collateral.
The private market currently values OpenAI at an astronomical price. The startup successfully raised fresh funds at an $852 billion valuation in March. This represents a massive leap from the $500 billion valuation it held during a previous funding round in October. While the valuation climbs, serious doubts have begun to emerge about the company’s actual business operations.
A recent Wall Street Journal report published in late April caused severe panic among technology investors. The newspaper revealed that OpenAI completely missed its internal targets for both weekly active users and total revenue. Failing to meet these basic growth metrics suggests the hype surrounding artificial intelligence might not yet match reality.
Furthermore, the startup faces fierce competition from extremely wealthy rivals. Smaller companies like Anthropic and massive tech giants like Google continue to release their own advanced artificial intelligence models. Industry experts note that these rival models perform just as well, and sometimes even better, than OpenAI’s software. Losing its technological edge could spell disaster for a company valued at $852 billion.
Critics also point their fingers at the spending habits of OpenAI Chief Executive Officer Sam Altman. He recently locked his company into spending roughly $600 billion on new data center infrastructure over the coming years. Building massive computer servers costs a fortune, and investors wonder how the startup will ever generate enough profit to cover those bills. Meanwhile, rumors circulate that the company might launch an initial public offering later this year to raise additional cash from the public markets.
Financial rating agencies see the danger building on the horizon. In March, S&P Global Ratings officially downgraded its overall outlook on SoftBank. The agency stated that the asset liquidity, portfolio quality, and overall financial capacity of the Japanese conglomerate will likely deteriorate soon. They blamed this negative outlook directly on the massive and risky bet SoftBank placed on OpenAI.
Despite the stock drop and the credit downgrade, SoftBank Chief Executive Officer Masayoshi Son refuses to back down. He remains incredibly optimistic about the future of OpenAI and the artificial intelligence sector as a whole. Son views this massive financial bet as the perfect representation of his all-out approach to securing the future of technology.
