SoftBank just announced their earnings

this morning that they made $20 billion

off of OpenAI, at least on paper, and

now they want to invest 30 billion more.

This company, by the way, SoftBank, is

the same one that lost 16 billion on

Weiwork. Same CEO, same playbook, and

nobody is talking about it. They hit 1.6

billion net, which is a miss based on

what the analysts were expecting. But

they also reported a 19.8 cumulative

gain on OpenAI despite the fact that

this is just on paper. of that they

argue that $4.2 billion of the gain was

just this quarter which offsets their

losses on Qang DD and bite dance. They

own 11% of OpenAI, a company which by

the way was as we've said before here on

the channel does not make money. They

are not a profitable company. And the

CFO of Soft Bank, Yoshimitsuguto

said that 60% of the company's assets

are now quote ASI oriented investments.

And by ASI he means artificial super

intelligence. what Sam Alman is selling

us the dream of but has yet to

materialize. To free up this cash,

SoftBank has been making some troubling

moves. They actually sold their entire

stake in Nvidia for 5.83 billion and

then sold 12.73 billion worth of

T-Mobile stock. So, they are

centralizing around these ASI plays and

specifically around investments in

OpenAI, a company that does not make any

money. And it actually gets juicier than

that. They're actually taking out loans

against ARM Holdings to help finance

this. This is like your buddy who is

always losing money on gambling. Never

wins. Has gone from middle class salary

to pretty much destitute over the past

year. Frittering away all of his money

on gambling. And he comes to you and

he's just like, "Hey man, can I borrow

10 bucks? I got some inside information.

Can I just borrow 10 bucks?" That's

exactly what SoftBank is doing here.

They're buying from all their other

investments. They're getting loans and

they're funneling it all into ASI plays,

which we know based on their balance

sheet is primarily open AI investment, a

company that does not make money. And

maybe it's already a sunk cost fallacy

at this point. SoftBank has already put

30 billion into OpenAI. As I mentioned,

SoftBank is OpenAI's largest private

backer. So, why not throw some more cash

at it? OpenAI, as you know, if you've

been watching the channel, is working on

a $100 billion funding round, and

SoftBank is considering funding 30

billion of that. By the way, that

funding round would value Open AI at

between 830 and 850 billion. And you

know, we like to contextualize stuff on

this show. That's about the same GDP as

Argentina, which is like not a super

rich country, but at the same time, this

is a company in the US led by a guy that

has never had a real job and is not an

engineer. So, he's doing pretty well for

himself. And what's more concerning is

the CEO of the same company, Masayoshi,

says that we are 10 years from

artificial super intelligence that is

10,000 times smarter than humans. So,

they're betting the entire company on a

hypothesis that by the CEO's own

admission is not coming anytime soon.

And if you don't take my word for it,

take Sam Alman's cuz he's a super

credible guy, right? That always

delivers on what he says in a reasonable

time frame. By their own projections,

they're expecting 14 billion in losses

in this year alone. Just setting 14

billion on fire R&D. Maybe the model

gets a little bit better. Who knows?

That would make for 44 billion

cumulative losses through 2028. Which

means, as we've said many time on this

channel before, they will not be

profitable at soonest if they survive

until 2030. They're raking in money

handover fist. They made 20 billion in

2025, but their burn rate is 57% of

their revenue, which you might say it's

a new type of company. We don't really

know how to value them. And that's fine.

That's a good claim. It's a good

thought. But when we look at Anthropic,

their burn rate is expected to drop to

about 9% by 2027. OpenAI says, "No, full

boore. We're going to keep it at 57%.

We're going to go until the wheels fall

off." The company is obviously in

trouble. You'll remember that they

declared a code red in December where at

that point and continuously, Google

Gemini was beating them on benchmarks

and Anthropic took 40% of enterprise

share, which was a huge shakeup, a huge

upset. So, SoftBank is making a $30

billion bet on a company that apparently

the leadership does not even think will

pay off for the next decade as soonest.

A company that is burning money faster

than investors can get them the money

and is led by somebody who is not an

engineer and has never had a real job.

By the way, if you like the hat, it's by

abandonware. The link is down there in

the bio. And actually, this is related

in caret 95. You know, it makes me

nostalgic. The other thing that makes me

nostalgic is what's going on between

SoftBank and OpenAI because I start to

wonder, I think I've actually seen this

before. And hey, wasn't it with Weiwork

that the last time something like this

went down? And in fact, you'd be right.

This is the same bank that made the

ridiculous Wei work play. It is not only

structurally the same, it is the same in

the features. Adam Nyman, who founded

Weiwork, was a hu, a charlatan, a fraud,

just like Sam Alman is. They have an

incredible number of things in common.

So you have a visionary founder, a

massive out of proportion valuation,

dreams of boiling the oceans and

SoftBank is right there to write the

check. And the CEO of SoftBank,

Masayoshi, he has been called the quote

billion dollar loser since 2020. So he

cannot live this down even the numbers

on that were less severe, but still of

the same magnitude. In 2023, SoftBank

posted a $5.2 billion quarterly loss

because of wei work. So same guy saying,

"Trust me, different this time.

give me those 10 bucks so I can go bet.

SoftBank made $20 billion on paper,

which is not money. It's paper. And

anyone who held stocks in 1999 will tell

you the exact same thing. The question

isn't is OpenAI a real company that's

providing value. It is that's

established at this point. These AI

tools to at least some degree are

extraordinarily helpful. The question is

whether the juice is worth the squeeze

and whether SoftBank and other investors

are making an extremely poor bet based

on hype here. That's what history says.

So, with the Weiwork scheme and

SoftBank's involvement in that, and that

is what I say as the AI bubble begins to

pop. Thanks for watching. Please

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