SoftBank Profit Jumps On OpenAI Valuation, Funding Risks Grow

Profit Turns Positive As OpenAI Marks Lift SoftBank Results

SoftBank reported a net profit that jumps to 248.6 billion yen for the October to December 2025 quarter, reversing a 369 billion yen loss a year earlier. The swing matters for markets because the group’s balance sheet is increasingly tied to private artificial intelligence valuations, which can move equity risk appetite and credit spreads in the same session.

SoftBank shares rose 2.4% before the results, and the company extended its run to four consecutive profitable quarters. The performance does not remove volatility risk; it shifts attention to how quickly paper gains can be turned into cash without adding leverage.

OpenAI Valuation Gains Make SoftBank A Listed Proxy

The quarter’s lift came from the rising valuation of SoftBank’s OpenAI exposure. Jumps in OpenAI pricing helped generate a 2.8 trillion yen investment gain over the nine months to the end of December, after SoftBank invested more than $30 billion and built a stake of around 11%. That scale means any change in OpenAI pricing, even without an exit, can move SoftBank’s reported profit and its net asset value narrative.

OpenAI is also seeking another capital injection of about $100 billion at a reported valuation target near $830 billion. A higher number would strengthen the mark, but it increases scrutiny on cash burn, because training and running models requires sustained spending on chips, power, and data-centre capacity.

Funding Risks Grow As The Group Taps Liquidity Levers

The bigger market question is funding. To bankroll its artificial intelligence push, SoftBank has sold assets, including a $5.8 billion exit from Nvidia and the sale of part of its T-Mobile stake for $12.73 billion between June and December 2025. Those sales provide cash, but they reduce the pool of liquid securities available if another large cheque is needed in 2026.

SoftBank has also leaned harder on pledged collateral. It expanded a margin loan secured by Arm shares to $20 billion from $13.5 billion and used the remaining capacity, and it raised the amount it can borrow against its domestic telecoms unit shares to 1.2 trillion yen from 800 billion yen. Raises in secured borrowing can amplify downside if the pledged shares fall and lenders demand more collateral.

Bonds And Credit: Leverage Sensitivity Is Back In Focus

SoftBank’s long-term credit remains rated below investment grade by S&P, making the group more sensitive to shifts in global risk sentiment than higher-rated issuers. Nomura’s Shogo Tono estimated the ratio of loans to the value of SoftBank’s assets may have risen to 21.5% at the end of December from 16.5% three months earlier, a move that can widen spreads if rates rise or valuations drop.

If SoftBank issues new bonds to fund additional commitments, it adds corporate duration supply, which can nudge funding costs higher for other leveraged issuers. The same dynamic feeds foreign exchange: bigger dollar funding needs can support the U.S. currency and pressure the yen during risk-off phases.

Equity Channel: The Bet On Scale Versus Competition

SoftBank’s equity story now rests on whether OpenAI’s growth can outrun intensifying competition from other model developers. Costs to train and serve models have been rising, and a faster spend pace would push SoftBank toward more borrowing or fresh monetisation of holdings. That risk is why the stock has traded like a high-beta expression of artificial intelligence sentiment, rather than a diversified investment company.

If OpenAI’s valuation keeps climbing and funding terms stay supportive, the upside can spill into Japan technology and the broader AI supply chain, including semiconductors linked to Arm’s ecosystem. If valuations compress, the hit can spread into lenders and brokers that intermediate collateralised loans, as margin requirements tighten.

Base Case: Paper Gains Hold, Funding Stays Orderly

Base case, OpenAI marks remain firm through mid-2026 and SoftBank funds new commitments mainly with existing cash, staged asset sales, and committed credit lines. A trigger is a funding round that closes near the targeted valuation without a step change in leverage beyond current collateral facilities. Under this path, SoftBank profit remains positive, bond spreads stabilise, and implied volatility fades.

Upside Scenario: Higher Valuation Lifts Net Asset Value And Lowers Spreads

Upside, OpenAI secures the $100 billion round on strong terms and shows improving unit economics, lifting the value of SoftBank’s stake while reducing perceived funding risk. Triggers include larger enterprise contract renewals, a slower rate of cost growth, and an ability to fund expansion without aggressive borrowing. In this outcome, the stock can jump again and credit spreads can tighten as refinancing risk declines.

Downside Scenario: Valuation Drop Forces Deleveraging

Downside, competition or weaker demand compresses OpenAI pricing, while a pullback in Arm shares tightens margin-loan conditions. Triggers include harsher funding terms, higher training costs, or collateral calls tied to the $20 billion Arm-backed facility. In that scenario, funding risks grow quickly, SoftBank bonds underperform, and volatility rises across global technology.