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SoftBank Group Corp. (TYO:9984) shares dropped sharply on Thursday despite the company reporting blockbuster fourth-quarter earnings, as investors grew increasingly concerned about the Japanese tech giant’s expanding financial exposure to OpenAI. The stock initially opened higher before reversing course and falling nearly 4% to 5,725 yen, underperforming the broader Nikkei 225 index, which edged up 0.2%.
The technology conglomerate posted a net profit attributable of 1.829 trillion yen ($11.61 billion) for the quarter ended March 31, significantly beating Bloomberg analysts’ forecast of 295.2 billion yen. The result also marked a dramatic increase from the 517.18 billion yen profit recorded during the same period last year.
Much of SoftBank’s earnings surge was driven by the rising valuation of OpenAI, the artificial intelligence company behind ChatGPT. As of the end of March, SoftBank’s stake in OpenAI was valued at approximately $79.6 billion, representing an estimated cumulative gain of around $45 billion from the company’s original investment.
While the strong gains highlighted SoftBank’s aggressive push into artificial intelligence, investors appeared uneasy about the risks tied to the company’s growing dependence on OpenAI. Concerns intensified after reports revealed that SoftBank financed much of its investment through large-scale borrowing.
The company still holds an outstanding balance of $17.5 billion from a $40 billion bridge loan used to support its OpenAI investment strategy. During fiscal 2025, SoftBank reportedly committed nearly $30 billion to OpenAI and sold several assets, including holdings in Nvidia Corp., to raise capital. The firm also secured loans backed by shares in Arm Holdings and SoftBank Corp.
Analysts say SoftBank’s future performance may now be increasingly tied to the success and valuation of OpenAI, making the company more vulnerable to volatility in the fast-moving AI sector.
