Shares of SoftBank Group Corp. fell on Wednesday in response to reports detailing large increases in OpenAI's spending and widening losses. The stock dropped as much as 5% to 6,730.0 yen before paring some losses to finish the session down about 3.1%, underperforming the Nikkei 225's 0.7% gain.
Reports released this week outlined a sharp rise in OpenAI's cash consumption and losses even as revenues expanded. One account indicated that OpenAI's cash burn in the first quarter of 2026 tripled year-on-year to $3.7 billion, while revenue during that same period rose threefold to $5.7 billion. The company continued to face profitability challenges, with the escalation of costs associated with operating its advanced AI models cited as a primary pressure.
Another report covering the prior year showed an even steeper deterioration in the company's bottom line. OpenAI's loss for 2025 was reported to have climbed nearly eightfold to $39 billion on revenue of roughly $13 billion. On an adjusted basis that excludes certain one-off items, the company's 2025 loss was reported at about $8 billion.
Investor unease around OpenAI's financial outlook has affected efforts to monetize stakes in the company. Last week it was reported that attempts by SoftBank to secure a $6 billion margin loan backed by its OpenAI holdings stalled amid doubts over OpenAI's valuation. In February, the startup had raised funds at an $852 billion valuation.
Additional reports that OpenAI planned substantial cuts to its AI pricing added to uncertainty about the firm's near-term revenue profile and margins. Those pricing discussions, combined with elevated operating costs, contributed to fresh questions about the scale and timing of returns on major investments into the company.
SoftBank has made large commitments to OpenAI, with total pledges exceeding $60 billion. While the conglomerate has seen a marked increase in the notional value of its initial investment, the recent reporting has stoked doubts about the stake. Competitive developments also featured in market concerns; reports noted notable progress by rival Anthropic in frontier models and enterprise AI, which has prompted reassessments of OpenAI's competitive positioning.
In a related development, the startup confidentially filed paperwork for an initial public offering last week. That move could create a mechanism for major investors, including SoftBank, to reduce their holdings in the company.
Key points
- OpenAI's cash burn reportedly tripled year-on-year to $3.7 billion in Q1 2026, while revenue also rose threefold to $5.7 billion - signaling rapid growth in both spending and sales.
- OpenAI's 2025 loss was reported at about $39 billion, with an adjusted 2025 loss of roughly $8 billion after excluding one-off items.
- SoftBank's stock fell as concerns mounted about OpenAI's valuation, stalled efforts to secure a $6 billion margin loan, pricing moves by OpenAI, and competitive advances by rivals.
Risks and uncertainties
- Valuation risk - Uncertainty around OpenAI's valuation has affected financing plans for SoftBank's stake, illustrating potential market sensitivity in large private-market positions.
- Profitability and pricing risk - Continued high operating costs to run advanced AI models, coupled with potential cuts to AI pricing, create uncertainty around future margins for the AI sector.
- Competitive risk - Progress by rival firms in frontier and enterprise AI has prompted reconsideration of OpenAI's business prospects, increasing strategic risk for investors in the sector.
These developments have influenced investor sentiment toward SoftBank, given the scale of its exposure to OpenAI. The combination of rapid cash burn, large reported losses, potential pricing shifts, and heightened competitive dynamics has created a more uncertain backdrop for valuing the company's stake and for SoftBank's near-term market performance.