By Anton Bridge
TOKYO, Feb 10 (Reuters) - Japan's SoftBank Group is expected to post a healthy profit on its investment in OpenAI when it reports quarterly results on Thursday, as the market focuses on how it will fund its artificial intelligence spending spree.
With OpenAI striking a string of multi-billion-dollar deals despite continuing to lose money, investors have grown concerned about the company's ability to finance those commitments, souring sentiment around major tech firms with which it has
close links.
SoftBank invested more than $30 billion in the ChatGPT-maker in 2025, bringing its ownership to around 11%, and is in talks to invest an additional up to $30 billion in the U.S. firm's latest funding round, Reuters reported last month.
Due to its heavy exposure to OpenAI, the Japanese investment firm is increasingly seen as a publicly traded proxy for the U.S. firm, with growing concentration risk and worries over the potential impact on its financial position, analysts said.
"The reality for SoftBank shareholders at the moment is that their fortune is tied with OpenAI," said Rolf Bulk, head of semiconductor and infrastructure research at Futurum Equities.
"Even if they do another $50 billion round they are going to require more funding in the coming years. The likes of Amazon and Google are spending well in excess of $100 billion per year in capex," he said.
Its "all-in" bet on OpenAI follows a familiar pattern for SoftBank founder and CEO Masayoshi Son, who favours high-conviction bets in companies that have yet to make a profit.
While OpenAI's recent funding rounds have each come at higher valuations, at present these are only gains on paper.
SoftBank should record an investment gain of $4.45 billion from the $22.5 billion OpenAI investment tranche that completed in December, according to an estimate by BTIG analyst Jesse Sobelson.
Five analysts surveyed by LSEG projected quarterly net income in a range between a gain of 1.1 trillion yen ($7.07 billion) and a loss of 480 billion yen.
FINANCING PLAN
Investors will be closely scrutinising how SoftBank's future investments in OpenAI can be financed, as it has already offloaded some of its most liquid assets to bankroll its bet on the AI firm.
In the September quarter, SoftBank announced it had sold its $5.8 billion holding of Nvidia shares and part of its stake in T-Mobile for $9.17 billion.
SoftBank has also issued more debt, increasing its leverage level. The ratio of loans to the value of SoftBank's assets may have jumped to 21.5% at the end of December compared to 16.5% three months prior, according to Nomura senior credit strategist Shogo Tono.
Even if SoftBank were to value OpenAI at $830 billion, the valuation the AI firm is targeting for its latest funding round, the leverage ratio would only edge down to 19.2%, Tono wrote in a note.
While SoftBank's long-term credit is rated non-investment-grade by S&P, it still has some financial leeway.
In November SoftBank increased the amount it could borrow against its ownership of chip designer Arm Holdings, of which $11.5 billion was still undrawn in December.
And it had 3.5 trillion yen of cash and cash equivalents at the end of September.
On top of this, analysts expect more monetisation of assets and debt issuance.
While external demand for OpenAI investment has been strong - the syndicated portion of last year's $40 billion investment was oversubscribed and Amazon and Nvidia are in talks to participate in the latest funding round - competition among AI firms is ramping up.
"Just six months ago OpenAI was considered the dominant player, but now its growth outlook and revenue forecasts are on par with competitors," Futurum's Bulk said.
($1 = 155.5100 yen)
(Reporting by Anton Bridge; Editing by Miyoung Kim and Muralikumar Anantharaman)
