Apollo Mulls Raising SoftBank Loan to $9 Billion for OpenAI Bets

Apollo Global Management and SoftBank Group are discussing a potential increase in the size of a $5.4 billion loan to $9 billion to support SoftBank's investment in AI company OpenAI. The loan, secured by assets in SoftBank's Vision Fund 2, has not yet been finalized. Apollo made the NAV loan to SoftBank's venture capital fund in 2021 and added $900 million in the following year, raising the total to $5.4 billion.

NAV loans utilize fund assets to generate additional cash for private capital firms. SoftBank has become a major investor in artificial intelligence, and its borrowing for this purpose has attracted attention. Credit default swaps for the company's debt have recently risen to a three-year high, reflecting growing concerns about AI safety.

SoftBank is also exploring a potential overseas junk bond sale, which could raise between $10 billion and $20 billion. The Vision Fund 2 has invested over 300 times since its inception and has recently increased its focus on OpenAI. The company has committed $64.6 billion to OpenAI, and its CEO, Sam Altman, has stated that an initial public offering is still planned but not expected to occur in 2023.

SoftBank has leveraged its stake in OpenAI to secure loans, including a $10 billion one in August from Apollo and other lenders.