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Like the FA Cup final or a Wallace & Gromit Christmas special, SoftBank’s full-year results presentations have become an annual tradition nearly everyone can enjoy.
The 2025 edition dropped today. It’s characteristically SoftBank. Here’s Slide 73.
Why is the webcam patient wearing a face mask? Shouldn’t the back-seat passenger be wearing a seatbelt? What’s worth photographing about sausage and chips and a flat pint?
Sorry, no time for questions or, apparently, grammar:
ASI stands for Artificial Super Intelligence. SoftBank’s Masayoshi Son stands for irrepressible techno-utopianism in the face of prodigious capital destruction. Here he is, combining the themes:
Several of the slides offer then-and-now comparisons. The one below features a 1982 issue of Oh MZ, SoftBank’s magazine for Sharp MZ computer owners, a copy of its 1984 video game Princess Tomato in the Salad Kingdom, and a Yahoo-branded BB Trio1 modem.
The cultural impact of these innovations cannot be underestimated.
Slide 69 shows SoftBank’s current portfolio, placing OpenAI at the centre of everything. Top billings go to Arm (which the company floated in 2023 while retaining a 90.6 per cent stake), Ampere (which SoftBank agreed to buy in March, though the deal won’t complete until the second half), and Stargate, its Trump-endorsed US artificial intelligence datacentre project with OpenAI:
Stargate has yet to break ground. Slide 41 illustrates the ground Stargate is yet to break:
Bloomberg reported on Monday that SoftBank hadn’t yet come through with the $100bn initial Stargate investment it had promised in January:
[M]ore than three months later, SoftBank has yet to develop a project financing template or begin detailed discussions with banks, private equity investors and asset managers.
Preliminary talks with dozens of lenders and alternative asset managers — from Mizuho to JPMorgan to Apollo Global Management to Brookfield Asset Management — kicked off earlier this year. But no deals have ensued, as financiers reassess data centers in the wake of growing economic volatility and cheaper AI services, according to people familiar with the matter, who asked not to be named as the information is not public.
Yoshimitsu Goto, SoftBank’s chief financial officer, said nothing on the conference call to contradict that report but did highlight that SoftBank has an option to cut a separately agreed investment in OpenAI from $30bn to a relatively modest $20bn.
These shifting parameters of SoftBank’s AI strategy can be seen in Slide 71, where OpenAI is joined by “Others” and “Others”:
A footnote says, “Cristal intelligence is a provisional name and not the official product name”. Cristal Intelligence, an enterprise AI joint venture with OpenAI, didn’t seem to be provisional name when it was announced in January. A copyright dispute with Champagne Louis Roederer, maybe? We’ll ask and update as required.
And what does Cristal (“a provisional name and not the official product name”) do? All is explained on Slide 44:
Apologies, production error. That’s not Slide 44. This is Slide 44.
It’s not all Shinyisms. There are some actual numbers on Slide 11, which is fairly early in the deck relative to previous years.
The KPIs show a 7.6 per cent decline in NAV, a nearly 28 per cent drop in cash & equivalents (OpenAI accounting for nearly all of the change) and a more than 20 per cent LTV increase net of asset-backed finance (ditto):
One metric absent from the presentation is SoftBank’s NAV discount, which has been stuck at around 60 per cent since early 2024. Its switch back this year from activist-pacifying share and bond buybacks to AI moonshots has only succeeded in widening the discount:
Caution seems appropriate. Presentation Slides 24 to 26 show that, with only one cumulative positive quarter in the past 11, SoftBank Vision Funds has not improved much since the exit in July 2022 of CEO Rajeev Misra.
Markups for ByteDance, TikTok’s parent company, have dragged Vision Fund One into positive territory but, since launch in 2019, Vision Fund 2 has somehow turned $60.8bn of investments into $37.9bn:
The Vision funds now only account for approximately 13 per cent each of Softbank’s NAV. Chip designer Arm (which has a transparent valuation because it’s Nasdaq-listed) accounts for about half the NAV so the stock’s deep discount can be seen as a vote of no confidence on SoftBank monetising the remainder of its portfolio.
A lot of that uncertainty is now hitched on OpenAI. SoftBank’s announcement in April that it was backing Sam Altman’s startup at a $300bn post-money valuation, almost double its $157bn October funding round, changed the investment case.
S&P Global said shortly after the news that the investment would restrict SoftBank’s financial capacity and, without corrective action, had put it on track for a possible ratings downgrade. Analysts have fretted about unlisted holdings growing to 25 per cent of the portfolio as of the March year-end 2025.
SoftBank’s presentation highlights a cash position of ¥2.6tn, and that its recently upsized margin loan against Arm shares adds ¥700bn of undrawn capacity. There’s no mention of the group’s ¥20tn of gross group debt and more than ¥2tn of bond maturities over the next two years.
Near-term credit metrics may look comfortable, but an ever-growing proportion of the portfolio is one mission-driven public benefit corporation that’s controlled by a non-profit. There’s a lack of long-term certainty. SoftBank bonds maturing in 2031 have drifted off par or better since the start of the year to trade on average at about 96 cents in the dollar.
Somewhat boldly, SoftBank chooses to include OpenAI among its list of companies being primed for IPO:
The smallprint on that slide reads: “OpenAI is included as a ‘late-stage’ portfolio company based upon its significant fundraising history and most recent valuation”. Coming just eight days after OpenAI ditched plans to convert to a for-profit business, that may sound like a bit of a reach.
And how does SoftBank sum up the overhanging sense of uncertainty? In Plasticine:
Never change, Masayoshi. Never let scorn, cynicism or debt refinancing requirements dim your indefatigable spirit.
Further reading:
— Presented without comment
— Some suggested slides for SoftBank
— SoftBank’s eggcellent quarterly results
— Masayoshi Son is back and it’s beautiful
— Checking in on SoftBank
— Arm’s an AI stock now. When’s the crash?
— When SoftBank’s selling, why are you buying?
— Inside Masa Son’s $5bn SoftBank IOU
— SoftBank’s My Little Pony recovery
— Get in line, SoftBank
— SoftBank-themed FTAV merch