SoftBank CDS Approaches Three-Year High! OpenAI Financing Concerns Intensify as "Paper Wealth" Fails to Quench Cash Thirst

SoftBank Group's credit default swaps (CDS) are hovering near a three-year high. Traders are assessing the potential impact of OpenAI's financing plans, and OpenAI is one of SoftBank's largest bets. According to data provider CMA, SoftBank's five-year CDS was quoted at about 383.2 basis points, close to its highest level since 2023. SoftBank has committed to investing $64.6 billion in OpenAI. The ChatGPT developer is in preliminary talks with investors for a new funding round that could value it at more than $1.2 trillion and would take place before an initial public offering (IPO). OpenAI CEO Sam Altman said earlier that the company's long-awaited IPO is still moving forward, but will not happen this year. "Financing costs are rising," analyst Sharon Chen wrote on Wednesday, saying that SoftBank's offshore bond spreads have widened due to supply concerns and rising exposure to OpenAI. She added that a delayed IPO could postpone SoftBank's ability to cash in on its OpenAI stake. SoftBank recently raised 1 trillion yen in Japan through retail bonds, while also preparing a potential overseas bond issuance. Wider CDS spreads could put pressure on the terms of future bond sales. SoftBank's bet on OpenAI began in early 2023, when Microsoft and OpenAI were locked in a tug-of-war over governance structure. Masayoshi Son led the Vision Fund in decisively stepping in, and the investment has since proceeded in stages. However, there is a fundamental mismatch between paper gains and cash liquidity. OpenAI is still not listed, and its equity cannot be cashed out in the public market, while SoftBank needs to keep fulfilling its investment commitments with real money. OpenAI's own financial condition is also intensifying market concerns. In the first quarter of 2026, OpenAI generated $5.7 billion in revenue, but its operating loss reached $9.3 billion, losing $1.6 for every $1 earned; in the second quarter, its operating loss widened further to $12.3 billion. HSBC forecasts that OpenAI's full-year cash burn in 2026 will reach $17 billion, with average daily spending of more than $46 million. Revenue growth relies entirely on piling up computing power investment and has never been able to form positive cash generation capacity. This means that even if SoftBank completes the full $64.6 billion injection, OpenAI will still continue to need external funding in the foreseeable future. S&P Global Ratings has already downgraded SoftBank's credit outlook from stable to negative because of this investment, with its analyst saying bluntly: "Arm's credit profile is solid, but OpenAI is very high risk. It is a startup, exposed to significant AI innovation risk and facing a lot of competition."