SoftBank Group has recorded its fourth consecutive quarterly profit, supported by a sharp rise in the valuation of its stake in OpenAI. The Japanese technology investment firm reported a net profit of 248.6 billion yen, or $1.62 billion, for the October to December quarter. This marks a strong turnaround from a net loss of 369 billion yen during the same period a year earlier.
The company’s earnings were boosted by gains linked to its investment in ChatGPT maker OpenAI. In the 9 months ending December, OpenAI contributed a 2.8 trillion yen investment gain to SoftBank. However, investors have raised concerns about the risks of heavy exposure to a single company in the fast growing artificial intelligence sector. According to a survey by a financial data firm, 5 analysts had forecast quarterly net income ranging from a profit of 1.1 trillion yen, or $7.07 billion, to a loss of 480 billion yen.
SoftBank, led by Masayoshi Son, has invested more than $30 billion in OpenAI and built a stake of around 11% in what it described as an “all-in” bet on the future of large language models. OpenAI is reportedly seeking an additional $100 billion in funding, with SoftBank, Amazon and Nvidia seen as potential investors at a higher valuation of $830 billion. To support its aggressive investment strategy, SoftBank has relied on asset sales, bond issuance and loans backed by holdings such as chip designer Arm.
The group has sold its $5.8 billion stake in Nvidia and divested part of its T Mobile holding for $12.73 billion between June and December last year. It has also expanded a margin loan backed by Arm shares to $20 billion from $13.5 billion and used the remaining capacity. Borrowing against shares of SoftBank Corp has been raised to 1.2 trillion yen from 800 billion yen. As OpenAI faces rising costs to train and operate AI models amid growing competition from companies like Alphabet, SoftBank’s deep exposure has made it a proxy for the U.S. firm in public markets. SoftBank shares closed up 2.4% in a flat market before the earnings announcement.
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