SoftBank Bets Big on AI While Keeping Its Balance Sheet Clean

SoftBank’s fiscal 2025 results reveal a conglomerate reshaping itself around artificial intelligence, with record subsidiary earnings and $64.6 billion committed to OpenAI anchoring its transformation.

Key Takeaways

• SoftBank Group reported nine-month net income of ¥3.17 trillion and a loan-to-value ratio of 20.6%, reflecting disciplined capital management amid aggressive AI deployment.
• Arm Holdings crossed $1 billion in quarterly revenue on AI chip demand, while SoftBank Corp. posted record FY2025 revenue of ¥7.04 trillion, providing stable cash flow for the parent.
• Cumulative OpenAI investment reached $64.6 billion, representing roughly a 13% stake, as Masayoshi Son deepens SoftBank’s alignment with frontier and physical AI development.

The Numbers Behind the Vision

When SoftBank Group convened its earnings briefing on May 13, 2026, it presented something rarer than a strong set of numbers: a coherent strategic narrative, substantiated by financial results. For the fiscal year ended March 31, the Tokyo-based conglomerate delivered figures shaped not by a single quarter of favorable mark-to-market accounting but by a structural repositioning that has been years in the making.

For the nine months to December 31, 2025, SoftBank Group reported net sales of ¥5.72 trillion, up 7.9% year-on-year. More striking was the surge in income before income taxes, which reached ¥4.17 trillion against ¥1.27 trillion in the comparable period, a gain driven substantially by valuation increases on investment holdings, most notably OpenAI. Net income attributable to owners of the parent reached ¥3.17 trillion. Total assets stood at ¥55.56 trillion, with net asset value of approximately ¥30.9 trillion, or roughly $194 billion, at end-December, recovering toward ¥33 trillion on pro forma adjustments. The loan-to-value ratio of 20.6% held comfortably inside the self-imposed ceiling of 25%, a signal to bondholders and equity investors alike that financial prudence has not been abandoned in the pursuit of transformative bets.

These metrics illuminate the dual architecture of the SoftBank model. Investment gains, inherently volatile and subject to reversal, generate the headline swings. Beneath them, operating businesses provide something more durable.

Arm and the Telecom Foundation

The most important operating asset in SoftBank’s portfolio remains Arm Holdings, the Cambridge-based designer of energy-efficient processor architectures in which SoftBank retains a controlling interest. Arm crossed $1 billion in quarterly revenue in recent periods, driven by surging demand for AI-optimized chip designs across data center and edge computing applications. Its chips now power the full spectrum of modern compute, from consumer smartphones to hyperscale training clusters running foundation models. Record revenues and expanding margins at Arm have reinforced the thesis that foundational semiconductor intellectual property, rather than pure software or venture exposure alone, represents one of the more defensible positions in the AI supply chain.

The domestic telecom subsidiary, SoftBank Corp., delivered equally solid results for its own fiscal year. Revenue reached a record ¥7.04 trillion, up 8% year-on-year. Operating income rose 5% to ¥1.04 trillion, while net income attributable to owners came in at ¥550.8 billion, also up 5%. Growth was broad-based: enterprise ICT services expanded, PayPay continued its trajectory as a leading domestic digital payments platform, and consumer mobile held steady in a competitive market. These results, released ahead of the group briefing, framed the parent’s narrative favorably and confirmed that the operational core continues to generate reliable cash flows, irrespective of investment portfolio volatility.

Together, Arm and SoftBank Corp. provide the ballast that distinguishes the current SoftBank from the more leveraged, less operationally grounded entity that navigated the Vision Fund turbulence of the early 2020s.

The OpenAI Position and the AI Infrastructure Thesis

SoftBank’s cumulative investment in OpenAI reached approximately $64.6 billion by early 2026, securing roughly a 13% stake in the company widely regarded as the frontier of large language model development. That figure represents one of the largest concentrated positions any single investor has taken in a private technology company in recent memory, and it places SoftBank at the center of what may prove to be the most consequential commercial technology transition of this decade.

Masayoshi Son’s framing of the opportunity has evolved. Where the Vision Fund era was characterized by a diversified sweep across consumer internet and software businesses, the current strategy narrows toward what Son has termed the “ASI era,” a world in which artificial superintelligence reshapes economic production. This is not merely a philosophical position. It informs capital allocation directly, with SoftBank pursuing stakes in robotics companies, compute infrastructure providers, and entities such as Ampere Computing that bridge software intelligence with physical hardware.

The pivot toward what analysts have begun describing as “physical AI” acknowledges a structural reality: large language models and generative AI systems require enormous quantities of specialized silicon, energy, and data center capacity to operate at scale. Whoever controls the infrastructure layer, not just the application layer, will capture a disproportionate share of the economic value created. SoftBank is positioning on both levels.

Valuation Discipline and Market Skepticism

Despite the operational strength and portfolio gains, SoftBank Group shares continue to trade at a discount to NAV, a persistent feature of the stock that reflects investor uncertainty about the reliability of fair-value accounting for large private positions and the execution risks attached to multi-decade transformational bets. Management has responded not with reassurance rhetoric but with demonstrable balance sheet discipline: maintaining liquidity buffers equivalent to two years of bond maturities and refraining from the aggressive leverage that characterized earlier fund vintages.

NAV calculations incorporate a conservative mix of listed assets, including stakes in T-Mobile and Deutsche Telekom, alongside private positions. Pro forma adjustments post-quarter have generally shown upward revisions, reflecting mark-to-market gains in AI-adjacent names. The market’s skepticism may narrow as investment realization events, whether through IPOs, secondary sales, or dividend flows, convert paper gains into tangible liquidity.

Risks and Structural Resilience

The risks are real and should not be minimized. Fair-value gains can reverse as quickly as they accumulate. The capital intensity of AI infrastructure, covering data centers, purpose-built chips, and energy supply, could compress near-term free cash flow even as long-term optionality expands. Geopolitical friction around semiconductor supply chains, regulatory attention on large cross-border technology investments, and yen volatility all bear watching.

Yet SoftBank’s structural resilience is more pronounced today than at any point in the past five years. The operating businesses generate cash. Arm is compounding through a genuine product cycle. The OpenAI position carries asymmetric upside if frontier AI achieves commercial scale on anything approaching current projections. Guidance for FY2026 reflects continued ambition at the subsidiary level, with management targeting further record earnings from SoftBank Corp. and sustained momentum at Arm.

For senior investors and policymakers, SoftBank’s FY2025 results offer a lucid study in how conviction capital, applied with financial discipline, can position a conglomerate at the intersection of the most significant technology transition of a generation. The transformation is not complete. It rarely is in the middle of a genuine inflection point. But the architecture is in place, and the direction is unambiguous.