SoftBank Borrows $11 Billion to Feed Its OpenAI Bet

SoftBank Group is turning to the junk-bond market to keep pace with its own ambitions. The Japanese investment giant said this week that it plans to raise more than $11 billion in high-yield debt, with almost all of the proceeds earmarked for the next instalment of its enormous wager on OpenAI.

The offering is split into two currencies. According to reporting from The Japan Times and Quartz, it comprises roughly $10 billion in dollar-denominated notes across three maturities and about 1 billion euros in two further tranches. Fitch assigned the notes a BB+ rating, the highest rung of speculative grade and one notch below investment quality.

Where the money goes

The bulk of the cash is destined for SoftBank's $10 billion contribution to the third tranche of its OpenAI follow-on investment, a payment slated to settle at the start of October. The rest is set aside for general corporate purposes.

Stack the instalments together and the scale becomes hard to ignore. SoftBank's total commitment to OpenAI is approaching $65 billion in exchange for a targeted 13 percent stake, a figure that implies a pre-money valuation of around $730 billion for the ChatGPT maker. If the bond sale closes at its planned size, bankers say it would rank as the largest non-financial corporate bond offering on record in Japan and the wider Asia-Pacific region, edging past a $10.93 billion sale by 7-Eleven's parent in 2021.

Borrowing to build

What makes the deal notable is not just its size but its shape. Masayoshi Son is financing an equity bet on a company that is still deeply unprofitable by issuing debt that sits below investment grade. That is a bet layered on a bet, and it lands at a moment when investors are asking harder questions about how much of the AI boom is real revenue and how much is capital chasing a story. We examined that tension in our look at whether the AI bubble is about to burst.

For now, demand for exposure to the frontier labs remains strong enough that a speculative-grade issuer can raise eleven figures to buy a slice of one. Whether that appetite holds through October, when the tranche settles and the next round of AI spending numbers arrives, is the more interesting question.