Synopsis
SoftBank is seeking additional banks to join a $40 billion loan backing its OpenAI investment, a significant test of investor confidence in its AI strategy. This debt-fueled push, alongside over $30 billion already invested in OpenAI and its Arm Holdings stake, has raised concerns about SoftBank's liquidity and credit quality, prompting a negative outlook from S&P Global Ratings.Listen to this article in summarized format
The deal has recently entered a so-called “soft launch” phase, with additional lenders being invited to join as sub-underwriters, according to people familiar with the matter. Those interested are required to commit around $5 billion each, the people said, who asked not to be identified discussing private matters.
JPMorgan Chase & Co., Goldman Sachs Group Inc., Mizuho Bank Ltd., Sumitomo Mitsui Banking Corp. and Mitsubishi UFJ Financial Group Inc. have underwritten the bridge facility that is set to mature on March 25, 2027, SoftBank announced last month.
The mega loan highlights how much debt founder Masayoshi Son is willing for the company to take on as it seeks to secure the firm’s pivotal role in the global AI race. The group’s latest bet on OpenAI comes on top of more than $30 billion the company has already injected into the startup, which is one of its biggest holdings alongside a roughly 90% stake in chip designer Arm Holdings Plc.
SoftBank’s heavy investment push into AI, coupled with a rising debt load to fund those bets, has unsettled market watchers. In March, S&P Global Ratings lowered the group’s credit outlook to negative from stable, citing the danger that its investments in OpenAI may hurt the Japanese company’s liquidity and credit quality of its assets.
A media representative for SoftBank declined to comment.
Separately, SoftBank is also tapping the bond market for additional source of funding. It is in talks with investors ahead of a possible six-part dollar and euro bond sale, said another person familiar with the matter.
