SoftBank Group reported an 18% year-on-year decline in first-quarter net profit on Thursday, though earnings came in better than market expectations, supported by strong investment gains from its stake in chipmaker Intel and other portfolio holdings, according to Reuters.
The Japanese investment and technology conglomerate posted net income of 347.3 billion yen ($31.7 billion) for the April-June quarter. While profit declined from a year earlier, the result was cushioned by robust gains from listed investments despite the absence of any valuation increase from its stake in ChatGPT developer OpenAI.
Intel and ByteDance Drive Investment Gains
SoftBank recorded an investment gain of 1.86 trillion yen during the quarter, with its shareholding in Intel emerging as the largest contributor, Reuters reported. Intel's share price has rallied in recent months as the semiconductor company continues its restructuring efforts under Chief Executive Lip-Bu Tan.
The group also booked gains from its investment in ByteDance, the parent company of TikTok, further supporting quarterly earnings.
OpenAI Remains Central to AI Strategy
Despite no fresh valuation gains from OpenAI during the quarter, the artificial intelligence company remains at the center of SoftBank's long-term investment strategy.
According to Reuters, SoftBank's cumulative investment in OpenAI is expected to reach $64.6 billion by October, giving it an ownership stake of roughly 13%. The company said its total investment gain from OpenAI currently stands at $45 billion.
OpenAI is preparing for an initial public offering that could take place next year, making its future valuation a key factor for SoftBank's financial performance.
Financing AI Ambitions
SoftBank disclosed that it secured a $10 billion loan from financial institutions in August using its OpenAI stake as collateral. Reuters had previously reported that negotiations over the financing were delayed because lenders faced challenges in valuing OpenAI, which remains privately held.
Founder and CEO Masayoshi Son has continued reshaping SoftBank's portfolio to fund its aggressive AI expansion, including selling stakes in companies such as Nvidia and T-Mobile.
The company has also obtained a $40 billion bridge loan to finance investment commitments through 2026. However, the facility expires in March 2027, after which SoftBank will need to repay or refinance the debt.
Major Investment Commitments Ahead
SoftBank has lined up substantial investments for the second half of 2026 as it expands its artificial intelligence and technology portfolio.
According to Reuters, the company has committed $20 billion in additional funding for OpenAI, $5.4 billion to acquire ABB's robotics business, and $3.1 billion to acquire digital infrastructure investor DigitalBridge.
Net Asset Value Eases from Record High
SoftBank said its net asset value reached a record high in June before easing in recent weeks. As of August 5, the company's net asset value stood at 58.3 trillion yen, reflecting changes in the valuation of its investment portfolio.
