OpenAI Helps Drive up Profits for Japanese Backer SoftBank

Japanese conglomerate SoftBank’s quarterly profits jumped nearly threefold thanks to its stake in OpenAI.

The company released earnings Wednesday (May 13) showing its net profit more than tripled to 1.83 trillion yen, or $11.6 billion.

SoftBank has invested more than $30 billion in OpenAI and said it had recorded a cumulative $45 billion increase on that stake in the last year, much of it during the fourth quarter. This helped offset losses on investments in companies such as Klarna.

The company’s initial investment in OpenAI came in 2024, when the artificial intelligence (AI) startup was valued at $150 billion. That figure has since ballooned to $852 billion following a record round of funding last month.

A report on the earnings by the Financial Times notes that SoftBank’s ability to take part in the funding rounds that have boosted OpenAI’s valuation — which can then in turn bolster SoftBank’s numbers — has caused some analysts to express concerns.

The report cites a note from analyst Atul Goyal at Jefferies, who has characterized the situation as “circular funding dynamics,” writing in a note that of the estimated $70 billion in actual cash OpenAI has raised in the last year, nearly 85% has come from SoftBank.

“This concentration creates a self-reinforcing valuation loop,” Goyal wrote.

In other OpenAI news, PYMNTS CEO Karen Webster wrote about the company’s efforts — and those of Amazon — to develop a device to take on Apple’s iPhone.

“The conventional analysis of these moves focuses on whether OpenAI or Amazon can compete with the iPhone,” Webster wrote. “History would say, whoa, not so fast. The Fire Phone. Windows Phone. Facebook phone. The graveyard of failed smartphone challengers is deep and well-populated with some of the biggest names in tech. Then again, maybe that was then and this could be what’s next.”

The question, she added, is not whether OpenAI is able to outsell Apple. Rather, it’s what happens when a company that has 900 million weekly active users and 50 million paying subscribers decides that it wants to stop accessing those users via another firm’s hardware.

ChatGPT is the largest tenant in the Apple App Store, with Apple taking a piece of every subscription sold through it.

“That’s a business relationship that works until it doesn’t. And OpenAI is clearly signaling that it wants to own the full stack,” Webster wrote.