SoftBank junk bond sale raises stakes for CEO Son’s all-in AI bet

SoftBank has issued a record US$11 billion (S$14.1 billion) junk bond offering, highlighting CEO Masayoshi Son's all-in bet on artificial intelligence (AI) amid concerns about possible market overheating. The debt issuance in September adds to a surge in corporate borrowing in 2026, with major bond sales from companies like Amazon.com, Alphabet and Tencent.

Son's investments, including US$64.6 billion for ChatGPT maker OpenAI, have made SoftBank a bellwether for AI sentiment. SoftBank is now borrowing at record yields of up to 9.75% to retain assets it believes will appreciate, rather than selling them. SoftBank Investment Advisers' CEO Alex Clavel said the 9.75% coupon is still reasonable given OpenAI's appreciation.

The company's shares reached a record high in June, but have since fallen 38%, while its credit default spread has jumped 24%. Analysts warn of SoftBank's concentrated portfolio and the payoff timeframe for its AI expenditures. Despite mixed results in past investments, Morningstar senior equity analyst Dan Baker believes AI-driven businesses have a significant transformative potential, suggesting SoftBank may succeed despite its risks.