SoftBank Group’s latest quarterly results are in, and prove that the AI hype is still going strong.
The earnings results show a drastic improvement for the Japanese technology giant, with net profit more than doubling to ¥2.5 trillion ($16.6 billion).
This boost is largely thanks to valuation gains from the company’s massive investment in OpenAI, which is the driving force behind CEO Masayoshi Son’s latest push toward AI.
SoftBank’s high-stakes bet on OpenAI
SoftBank has been making waves in the investment world and has become one of the most significant financial beneficiaries of the current AI boom. Its Vision Fund reported a gain of ¥3.5 trillion in investments, much of which resulted from its OpenAI holdings, and is now estimated to total ¥2.16 trillion for the quarter.
SoftBank’s commitment to OpenAI has the company expecting its total investment to reach $34.7 billion by the end of 2025. Although critics warn of the “AI bubble” inflating valuations beyond sustainable profit expectations, Son’s strategy mirrors his belief that AI represents the “evolution of civilization.”
Of course, the company’s gains are not without risk. To finance its OpenAI expansion and other AI-related ventures, such as its plans for data centers and semiconductor design firm Ampere Computing, SoftBank has turned to selling major assets, raising its bonds in multiple currencies, and taking out bridging loans totaling over $15 billion.
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The Nvidia exit and the logic behind it
One of SoftBank’s most shocking moves yet was its complete divestment from Nvidia, which generated $5.8 billion. The sale occurred just months after Nvidia’s record-breaking stock market surge that established its leadership in the world of AI hardware. SoftBank had previously built its Nvidia stake to $3 billion by March but exited in October to reallocate funds toward its AI infrastructure projects, including, you guessed it, OpenAI.
This Nvidia sale can be seen as both a pragmatic funding move and a signal of shifting priorities. “Selling the entire stake must mean Son is no longer optimistic about the share price,” said Wong Kok Hoi, CEO of APS Asset Management.
Despite investor caution, SoftBank’s stock has nearly quadrupled over the past six months, prompting a four-to-one stock split effective January 1. Now we’ll have to sit back and watch to see whether the AI wave represents a sustainable boom or the prelude to a bubble. But for now at least, Son’s bet on OpenAI has placed SoftBank at the center of the global AI arms race.
Microsoft is investing $10 billion to build an AI data center hub in Portugal, partnering with Start Campus and Nscale to power Europe’s AI future.