New Delhi: SoftBank Group is looking to raise another $10 billion loan as it works to fund its growing investment in OpenAI, according to a reports. It reflects the extent to which the Japanese technology investor is funded by debt to back its significant investment in AI.
SoftBank has pledged to invest a further $30 billion in OpenAI, having already invested $20 billion in the company in April and July. The remaining $10 billion is planned for October 2026. To finance these investments, SoftBank has set up a $40 billion bridge loan facility.
Now, it’s turning to various strategies to handle that debt. SoftBank has stated that it is considering a bond sale ranging between $10 billion and $20 billion to repay some of the loan. The bond issue could be offered in dollars or euros and may be made as early as September, but it is still being debated and could be changed.
However, the ongoing investments in OpenAI by Softbank are been part of its continued efforts to prioritize AI as a primary investment area. In February, SoftBank revealed that it will going to invest an additional $30 billion in OpenAI, by bringing its total investment to approximately $64.6 billion, which equates to an approximately 13% stake after the transaction is complete.
The company has also said that it wants to use asset-backed financing to refinance its bridge loans. This may involve serving as security for future borrowing by utilising some of its holdings, such as its stake in OpenAI. SoftBank has indicated that an alternative would be to sell assets, but that could be done while still keeping exposure to future growth in the assets.
The move is another testament to the faith of SoftBank founder Masayoshi Son in OpenAI and the AI sector generally. But more debt entails greater financial risk if OpenAI or other investments lose value.
SoftBank’s financing approach will likely be followed by investors as the last $10 billion investment is anticipated to happen in October.
