SoftBank aims for $40B loan to boost OpenAI investment
SoftBank Group Corp. is pursuing a loan of up to $40 billion primarily to finance its investment in the US tech giant OpenAI, according to sources. This would mark its largest borrowing ever, exclusively in dollars. According to several individuals, the bridge loan would have a tenor of approximately 12 months. According to sources, four lenders, including JPMorgan Chase & Co., will be underwriting the facility. Discussions with banks are currently in progress, and specifics may evolve, the individuals noted. Representatives for JPMorgan and SoftBank chose not to provide a comment. The potential size of the loan highlights SoftBank founder Masayoshi Son’s bold effort to establish his company as a key player in the global AI boom. The $30 billion investment in OpenAI adds to the over $30 billion already poured into the startup, which now stands at the heart of Son’s aspirations — a wager that echoes his earlier stakes in ByteDance Ltd. or Alibaba Group Holding Ltd., but at a significantly greater cost.
The Japanese company, which held approximately 11 percent in OpenAI at the end of December, has divested assets including its stake in Nvidia Corp., to finance its increasing investment in OpenAI. The US company now stands as one of SoftBank’s largest holdings, alongside a nearly 90 percent stake in chip designer Arm Holdings Plc, even as investments in other areas decelerate. The performance of the Japanese company’s shares has been closely linked to ChatGPT’s standing in comparison to Google’s Gemini and Anthropic PBC’s Claude. Nonetheless, the magnitude of SoftBank’s investment — coupled with ongoing apprehensions regarding a potential bubble due to the absence of a genuinely mainstream application for AI services — has unsettled market analysts.
This week, S&P adjusted SoftBank’s credit outlook, highlighting concerns that its investments in OpenAI could negatively impact the Japanese company’s liquidity and the quality of its assets. SoftBank has also invested in smaller ventures beyond Sam Altman’s startup. SoftBank and OpenAI have made a significant joint investment of $1 billion in SB Energy, an infrastructure company collaborating with technology firms on the development of data centres in the United States. The company has also reached an agreement to acquire private equity firm DigitalBridge Group Inc. for approximately $3 billion in cash.
Last year, it acquired US chip designer Ampere Computing LLC for $6.5 billion and proposed a $5.4 billion acquisition of ABB Ltd.’s robotics unit. All these investments highlight the necessity for the tech investor to assume substantial amounts of debt. The company has already raised the amount of its margin loans backed by mobile unit SoftBank Corp. and chip unit Arm.
