SoftBank gets upsized $11.9 billion loan in OpenAI funding push

SoftBank Group Corp. has secured an $11.87 billion loan to bolster its investment in US AI firm OpenAI, according to sources familiar with the matter. This amount exceeds the initial $10 billion target set by the Japanese conglomerate. The two-year facility was finalized last week and attracted commitments from approximately 20 banks, although SoftBank declined to comment on the matter.

The financing comes amid growing concerns over the risks associated with AI development. OpenAI CEO Sam Altman recently stated in an interview with Fortune that his company would not proceed with a public offering this year due to safety-related concerns. SoftBank shares plummeted by up to 13% on Monday, marking their lowest point since July 17.

The latest borrowing marks a continuation of SoftBank's recent debt financing activities linked to its OpenAI investment. These include a $10 billion margin loan backed by its stake in OpenAI and a potential bond sale of up to $20 billion, despite warnings about increasing credit risks in the AI sector.

SoftBank announced last week that it would repay the remaining balance of a $40 billion loan it obtained earlier this year to finance its investment in OpenAI. The company aims to settle its $25.9 billion debt by September 15, according to a statement. The non-collateralized borrowing was scheduled to mature in March of the following year.

SoftBank is scheduled to meet with investors in New York this week to gauge interest in a potential US dollar junk-bond sale, with estimates ranging from $10 billion to $20 billion, according to sources familiar with the matter. The firm, founded and led by billionaire Masayoshi Son, plans to invest nearly $65 billion in OpenAI by October. So far this year, SoftBank has raised about $37 billion through offshore and domestic bond sales and loans, including the recent facility, as per Bloomberg-compiled data.