SoftBank’s $100 Billion Spinoff Gamble Hinges on Arm’s Earnings and Debt Discipline

SoftBank shares gain as investors eye Roze spinoff and AI investments, but $40B bridge loan and thin Arm float raise financial concerns.

SoftBank Group’s stock jumped 3.9% in Tokyo on Tuesday to ¥5,424, as investors weighed a flurry of corporate maneuvers against mounting financial pressures. The rally was fueled by positioning ahead of earnings and fresh details on the conglomerate’s sprawling AI infrastructure ambitions, but beneath the surface, the balance sheet is showing strain.

The centerpiece of SoftBank’s strategy is Roze, a proposed spinoff that would bundle robotics, energy assets and chip design into a standalone publicly traded company. Founder Masayoshi Son is targeting a $100 billion valuation for the entity, with a US listing planned for later this year. Roze would consolidate ABB’s robotics division — acquired for $5.4 billion last year — along with chip designer Ampere Computing, bought for $6.5 billion, and SB Energy, a renewable energy developer.

OpenAI and SoftBank have each committed $500 million to SB Energy, which has been contracted to build and operate a 1.2-gigawatt data center in Milam County, Texas. First units are expected online in 2026. SoftBank’s total cumulative investment in OpenAI stands at $64.6 billion, and it holds roughly 13% of the AI company.

Yet the timeline and valuation target for Roze are already generating internal debate. According to the Financial Times, some executives consider the current roadmap overly ambitious, raising questions about whether the spinoff can be executed on schedule.

Arm Holdings remains the linchpin of SoftBank’s entire financial architecture. The chip designer’s shares have surged 84% since the start of the year, driven by demand for its architectures in AI applications. SoftBank owns approximately 87% of Arm, valued at around $150 billion, making it by far the largest single asset on the conglomerate’s books. Arm is expected to report quarterly revenue of roughly $1.18 billion, representing 18% year-on-year growth, with adjusted earnings per share forecast between $0.54 and $0.62. Analysts are particularly focused on licensing income from the new AGI-CPU architecture, designed for autonomous AI systems.

The problem is that Arm’s thin public float makes it nearly impossible to use as collateral for meaningful borrowing. That limitation becomes critical given SoftBank’s recent $40 billion bridge loan — the largest dollar-denominated credit facility in the company’s history — which falls due within a year. The debt-to-equity ratio stands at 1.63x, while the interest coverage ratio is a thin 0.83x.

SoftBank’s net asset value slipped to ¥30.9 trillion in the third quarter, down ¥2.4 trillion from the end of September but up ¥5.2 trillion from a year earlier. The loan-to-value ratio of 20.6% remains within the group’s self-imposed limits, but the margin for error is narrowing.

In a move to tighten integration between chip technology and global investments, Arm CEO Rene Haas has taken on the additional role of CEO of SoftBank Group International. The dual mandate is designed to align the chip designer’s roadmap more closely with the conglomerate’s portfolio strategy.

Full-year results for the period ending March 2026 are due in May, when Arm also reports its quarterly numbers. Those releases will determine whether SoftBank’s AI bets are generating measurable returns — or whether the pace of investment is stretching the balance sheet past its breaking point.