SoftBank Group has signed an unsecured bridge loan agreement totaling up to USD 40 billion, which will be used to support its investment in OpenAI.
$SoftBank Group (ADR) (SFTBY.US)$On Friday, March 27, SoftBank Group signed an unsecured bridge loan agreement totaling up to USD 40 billion. The funds will be used to support its investment in OpenAI, setting a new record for the largest single USD loan in the group's history and underscoring its strategic determination to secure a central position in the global artificial intelligence race. This financing was jointly underwritten by JPMorgan, Goldman Sachs, Mizuho Bank, Sumitomo Mitsui Banking Corporation, and Mitsubishi UFJ Bank. Under the terms of the agreement, the loan has a tenure of 12 months. SoftBank stated that it plans to gradually repay the debt over the next year through asset sales and subsequent financing activities.
SoftBank Group's latest bet on OpenAI comes on top of its prior investment of over USD 30 billion in the startup. After this round of funding, SoftBank's cumulative investment in OpenAI will reach approximately USD 64.6 billion, increasing its stake to about 13%. Currently, OpenAI is one of SoftBank’s largest holdings, alongside Arm Holdings. $Arm Holdings (ARM.US)$ approximately 90% of the shares.
Arm’s stock price has risen by more than 40% this year, primarily driven by its plan to sell proprietary chips. This represents a significant positive development for SoftBank, given its stakes in hundreds of non-listed startups and its capacity to fund substantial investments in the artificial intelligence sector.
Bloomberg Intelligence noted that as Arm decides to sell proprietary chips, SoftBank’s exposure to investments in AI semiconductors will increase. Moreover, with OpenAI being among the first buyers, synergies may emerge within SoftBank’s AI ecosystem. Arm’s business model will evolve as its market expands from purely design to include chip sales. Management aims to achieve annual revenue of USD 15 billion within five years, up from USD 5 billion in 2025, although profit margins are expected to decrease accordingly.
In terms of broader strategic synergies, SoftBank is not only linking with OpenAI through capital injections but also planning deep cooperation in the field of computing power infrastructure. SoftBank is currently working on establishing the large-scale Piketon AI Data Center Campus in Ohio, USA. The construction cost for the first phase of the project is estimated to be between USD 30 billion and USD 40 billion, with OpenAI expected to become a core tenant.
This dual binding of 'capital + infrastructure' aims to create a vertically integrated ecosystem covering computing power, models, and applications. However, this large-scale borrowing has raised concerns among credit rating agencies. S&P Global has downgraded SoftBank’s outlook from 'stable' to 'negative' due to excessive risk exposure on its balance sheet to a single asset.
Editor/Doris