SoftBank posts $46 billion gain at Vision Fund driven mainly by massive OpenAI bet

SoftBank booked a yearly gain of $46 billion at its Vision Fund driven mainly by the huge rise in value of its investment in OpenAI.

The Japanese giant has invested more than $30 billion in OpenAI, with its investment gains in the company totalling $45 billion in the year ended March.

In the three months to the end of March, the Vision Fund saw a gain of around $20 billion, which was nearly all driven by OpenAI as SoftBank suffered losses on other investments such as Coupang, DiDi Global and Klarna.

SoftBank is looking to position itself in the center of the artificial intelligence boom with investments across various AI and chip companies, and Sam Altman's OpenAI forming the centrepiece.

SoftBank has committed to invest more than $60 billion in OpenAI which would give it around 13% ownership of the company, the company said in February. More than $30 billion of that as already been invested.

In March, OpenAI closed a funding round that was co-led by SoftBank and that valued the AI lab at $852 billion, even as the company faces intense competition from rivals like Google and Anthropic.

While the rising valuation of OpenAI has helped SoftBank's Vision Fund, the concentration of OpenAI in SoftBank's portfolio has raised concerns around its debt load. In March, S&P Global Ratings revised its outlook for SoftBank from "stable" to "negative."

The ratings agency said SoftBank's "asset liquidity and quality of its portfolio, and its financial capacity are likely to deteriorate because of its additional huge investment in OpenAI."

SoftBank could "limit negative financial impacts" by selling some assets, the ratings agency said. Indeed, SoftBank has been selling down stakes in companies like T-Mobile and Nvidia to fund its OpenAI bet.

The company said it earned 218.1 billion Japanese yen ($1.4 billion) from gains on these sales and other investments for the financial year. However, once factors like exchange rate and expenses are removed, SoftBank posted an investment income loss, excluding the Vision Fund, of 472.1 billion yen.

SoftBank CFO Yoshimitsu Goto stressed the importance of financial discipline on the earnings call, highlighting that the company has a 3.5 trillion yen cash position, which can cover more than two years' worth of bond redemptions.

Overall, the SoftBank group posted a 5 trillion yen net profit for the year, aided mainly by the Vision Fund and its telecommunications division.