Beyond Alibaba: SoftBank’s Massive Leverage in the Race for OpenAI

SoftBank Group Corp. is reportedly negotiating a massive bridge loan of up to $40 billion to bankroll its deepening commitment to OpenAI. According to individuals familiar with the private discussions, this would represent the largest dollar-denominated borrowing in the Japanese conglomerate’s history. Underwritten by a consortium of four major lenders, including JPMorgan Chase & Co., the financing is expected to carry a 12-month term.

This aggressive financial maneuver highlights founder Masayoshi Son’s determination to establish SoftBank as a central force in the global artificial intelligence sector. By committing an additional $30 billion to OpenAI—following a previous investment of the same magnitude—Son is placing a high-stakes bet that mirrors his legendary early backing of Alibaba and ByteDance. However, this venture comes with a significantly higher price tag and increased risk.

To fund this expansion, SoftBank has been restructuring its portfolio, notably divesting its stake in Nvidia. As a result, the company’s fortunes are increasingly tied to a few key assets: OpenAI and chip designer Arm Holdings Plc. This concentration means SoftBank’s market valuation is now inextricably linked to ChatGPT’s ability to maintain its competitive edge against rivals like Google’s Gemini and Anthropic’s Claude.

The sheer scale of this leverage, combined with skepticism regarding the long-term profitability of AI services, has made investors and analysts uneasy. S&P Global recently downgraded SoftBank’s credit outlook, warns that the heavy concentration in OpenAI could compromise the firm’s liquidity and overall asset quality.

Beyond the flagship partnership with Sam Altman’s startup, SoftBank is aggressively expanding its AI infrastructure. The company has teamed up with OpenAI for a $1 billion investment in SB Energy to develop U.S. data centers and recently acquired private equity firm DigitalBridge Group Inc. for $3 billion. These moves follow other multi-billion dollar acquisitions, such as chip designer Ampere Computing and ABB Ltd.’s robotics division. To sustain this spending spree, SoftBank has significantly increased its debt load, utilizing margin loans backed by its shares in Arm and its domestic telecommunications unit. This "all-in" strategy underscores Son's belief that AI is the definitive frontier, even as the company leans heavily on debt to secure its position.