(March 27): SoftBank Group Corp signed a loan of US$40 billion to finance its investment in OpenAI, adding to the Japanese company’s debt load as it seeks to stay abreast of a global artificial intelligence race.
The non-collateralised bridge loan, which will mature in 12 months, will be used for SoftBank’s US$30 billion follow-on investment in OpenAI as well as for other costs, the company said in a statement on Friday. JPMorgan Chase & Co, Goldman Sachs Group Inc, Mizuho Bank, Sumitomo Mitsui Banking Corp and MUFG Bank are underwriting the facility, which will be paid partly through the sale of assets, it said.
The loan, first reported by Bloomberg, is SoftBank’s largest-ever borrowing denominated solely in dollars. Its size reflects founder Masayoshi Son’s determination to position his company at the centre of a global AI boom.
SoftBank’s latest bet on OpenAI comes on top of more than US$30 billion the company has already injected into the startup, which is now one of its biggest holdings alongside a roughly 90% stake in chip designer Arm Holdings Plc. Arm’s shares are up more than 40% this year, boosted by its plans to sell its own chips. That’s a boon for SoftBank, which has stakes in hundreds of unlisted startups, and its ability to finance big bets in AI.
SoftBank’s exposure to AI semiconductors will rise with Arm’s decision to sell its own chips, and synergies within SoftBank’s AI ecosystem are possible as OpenAI is on the list of initial buyers. Arm’s business operations will change as its market expands to selling chips from just designing, with management targeting US$15 billion in annual revenue in five years compared with US$5 billion in 2025, though with lower margins.
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