【SoftBank’s bet on OpenAI has reached $64.6 billion, and AI investment is beginning to eat into profits】
SoftBank posted a net loss of 1.12 trillion yen from July to September, and its share price fell another 9.5% on November 11. The loss was not just due to declining investment gains: adjustments to procurement plans for power equipment for AI data centers in the United States led the company to recognize a loss of 597.2 billion yen. Financing costs also rose to 462 billion yen during the same period, doubling year over year.
Total investment gains fell 56% year over year in the first half. After an additional investment completed in October, SoftBank’s cumulative investment in OpenAI reached $64.6 billion, giving it an approximately 13% stake. As of the end of September, the investment’s fair value on the books was $99.6 billion, but its valuation was unchanged from the end of the previous fiscal year, with no new valuation gains in the first half. The money has been invested, but the book value has not continued to rise.
SoftBank’s main pressure now is that AI investment requires continued heavy spending, financing costs have risen markedly, and procurement adjustments can also bring real losses. The company still has the ability to raise financing and monetize assets, but investment returns must materialize at a pace that keeps up with the rate of investment.
Masayoshi Son is betting on AI’s long-term value, but the market is now asking when this investment will turn into profits. Even growth as fast as $OPENAI cannot automatically pay SoftBank’s interest bill.
SoftBank posted a net loss of 1.12 trillion yen from July to September, and its share price fell another 9.5% on November 11. The loss was not just due to declining investment gains: adjustments to procurement plans for power equipment for AI data centers in the United States led the company to recognize a loss of 597.2 billion yen. Financing costs also rose to 462 billion yen during the same period, doubling year over year.
Total investment gains fell 56% year over year in the first half. After an additional investment completed in October, SoftBank’s cumulative investment in OpenAI reached $64.6 billion, giving it an approximately 13% stake. As of the end of September, the investment’s fair value on the books was $99.6 billion, but its valuation was unchanged from the end of the previous fiscal year, with no new valuation gains in the first half. The money has been invested, but the book value has not continued to rise.
SoftBank’s main pressure now is that AI investment requires continued heavy spending, financing costs have risen markedly, and procurement adjustments can also bring real losses. The company still has the ability to raise financing and monetize assets, but investment returns must materialize at a pace that keeps up with the rate of investment.
Masayoshi Son is betting on AI’s long-term value, but the market is now asking when this investment will turn into profits. Even growth as fast as $OPENAI cannot automatically pay SoftBank’s interest bill.