SoftBank gets upsized US$11.9 billion loan in OpenAI funding push: sources

SoftBank, the Japanese conglomerate led by Masayoshi Son, has secured a US$11.87 billion loan to bolster its investment in US artificial intelligence firm OpenAI. This substantial financing, up from the earlier target of US$10 billion, was obtained through commitments from around 20 banks, according to sources familiar with the matter.

The loan, a two-year facility, comes as some executives advocate for a slowdown in AI development due to the escalating risks associated with the technology. OpenAI CEO Sam Altman recently indicated in an interview with Fortune that his company would postpone a public offering this year to address safety concerns. SoftBank's shares experienced a sharp decline of up to 13% following the news on September 14, marking the firm's most significant drop since July 17.

This latest borrowing adds to SoftBank's recent debt financing activities related to its stake in OpenAI, which include a US$10 billion margin loan backed by its OpenAI shares and the potential sale of a US$20 billion bond, despite concerns over growing credit risks in the AI sector. SoftBank announced earlier that it would repay the balance of a US$40 billion loan it obtained this year to finance its investment in OpenAI by September 15.

The company anticipates settling the remaining US$25.9 billion it owes on the same date. SoftBank plans to hold investor meetings in New York this week to gauge interest in a potential US dollar junk-bond sale, aiming to raise between US$10 billion and US$20 billion. Founded and led by billionaire Masayoshi Son, SoftBank intends to invest almost US$65 billion in OpenAI by October, having already raised the equivalent of about US$37 billion this year from offshore and domestic bond sales and loans, including the latest facility, as reported by Bloomberg-compiled data.