SoftBank Seeks Record $40 Billion Financing for OpenAI Investment

SoftBank Group Seeks Record $40 Billion Loan

SoftBank Group, led by Masayoshi Son, is engaged in discussions with multiple lenders for a 12-month bridge loan worth $40 billion. This loan is primarily aimed at financing its investment in OpenAI, a leader in the artificial intelligence space. The loan will be underwritten by four banks, including JPMorgan Chase & Company.

The potential size of the loan underscores Son's aggressive bid to position SoftBank as the nucleus of the booming AI space. The company aims to invest $30 billion in OpenAI, exceeding the $30 billion already infused. SoftBank currently holds an 11% stake in OpenAI, which represents the company's largest holding outside of Arm Holdings (90% stake).

SoftBank's investment in OpenAI has significant implications for the company's financial performance. The company's shares are now tied to the performance of ChatGPT against competitors such as Google's Gemini and Anthropic PBC's Claude. SoftBank has also jointly invested $1 billion in SB Energy, a data centre infrastructure company.

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The company's aggressive investments in the AI space have raised concerns about the potential AI bubble burst. S&P recently lowered SoftBank's credit outlook, citing the danger that its investments in OpenAI may hurt the company's liquidity and credit quality.

Credit Outlook

• S&P has lowered SoftBank's credit outlook, citing concerns about the potential AI bubble burst.
• SoftBank's $30 billion investment in OpenAI is a further drag on its credit profile.
• The company faces limited headroom under S&P's 35% adjusted LTV threshold.

Financial Highlights

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• SoftBank aims to invest $30 billion in OpenAI.
• The company has already infused $30 billion into OpenAI.
• SoftBank has jointly invested $1 billion in SB Energy.
• The company has agreed to buy DigitalBridge Group Inc. for approximately $3 billion in cash.
• SoftBank has invested $6.5 billion in Ampere Computing LLC and proposed a $5.4 billion acquisition of ABB Ltd.'s robotics unit.