The AI Funding Plans of Softbank Will Face Repercussions at Earnings

SoftBank Group (9984.T), a technology investor, released its first-quarter earnings on Thursday. Analysts were particularly interested in how the company would finance its continued investment in OpenAI and how increasing debt would affect its balance sheet.

SoftBank has grown to be one of OpenAI’s largest supporters, and the company’s capacity to continue funding its aspirations in AI has become a crucial test for the larger AI investment boom. Investor scrutiny of AI companies’ finances has increased as funding requirements and debt usage rise.

Although SoftBank reported a record net profit for the year ending in March 2026, the cost of insuring its debt against default has skyrocketed, and the company’s share price has nearly halved since the beginning of June.

The average of four analysts surveyed by LSEG predicts that SoftBank will report a net profit of 148.4 billion yen ($941.2 million) for the April–June quarter.

SoftBank has invested over $60 billion in OpenAI and similar AI infrastructure projects as a result of founder Masayoshi Son’s efforts to establish the Japanese company as a leading investor in AI. In August, 15 out of 20 sell-side analysts surveyed by LSEG rated the company as a buy or strong buy, and he recently called any discussion of an AI bubble “blasphemy.”

But with $30 billion in payments due in the second half of 2026 and an increasing reliance on loans secured against its holdings, investors are wondering how SoftBank will pay for its pledges.

The $40 billion bridging loan that SoftBank holds is set to mature in March 2027. It has secured a $20 billion margin loan on its ownership of chip designer Arm (O9Ty.F), opens new tab. However, because lenders are now more wary of granting credit backed by private companies, its effort to use its ownership of OpenAI as collateral for another loan has been delayed.

Because of the increase in Arm’s share price, which decreased the bank’s debt to asset value ratio, S&P upgraded SoftBank’s credit outlook from negative to stable in July.

Even as its investment in OpenAI has increased, SoftBank has consistently kept its loan-to-value ratio below its self-imposed restriction of 25%. Additionally, it keeps bond redemptions in cash and cash equivalents for a period of two years.