Masayoshi Son wants more OpenAI, and SoftBank is turning to the junk-bond market to help finance it.
SoftBank Group has launched a $10 billion dollar-denominated bond sale and a €1 billion (approximately $1.15 billion) euro-denominated offering, with proceeds set to help fund the Japanese conglomerate’s next $10 billion investment in OpenAI.
The senior unsecured notes are divided across five maturities: 3.5, 5.5 and 7.5 years for the dollar bonds, and four and six years for the euro notes, according to a term sheet cited by Reuters. The bonds are expected to price Sept. 24 and settle Sept. 29.
If completed at its planned size, the offering would be the largest Asia-Pacific and Japan nonfinancial corporate bond deal on record, surpassing 7-Eleven’s $10.93 billion sale in 2021, according to LSEG data cited by Reuters.
The financing will support the third tranche of SoftBank’s follow-on OpenAI investment, which is expected to close Oct. 1. The bond proceeds will also be used for general corporate purposes, while SoftBank plans to cancel all or part of the undrawn capacity under a separate 2026 bridge loan facility.
The cost of backing OpenAI
The size of the deal shows how heavily SoftBank is relying on debt to finance its AI strategy. The company has committed close to $65 billion to OpenAI, with its cumulative investment expected to reach about $64.6 billion after the third tranche, according to Quartz.
SoftBank has already repaid the $25.9 billion outstanding balance on a $40 billion bridge facility arranged earlier this year. It has also expanded other borrowing capacity, including a $25 billion margin loan backed by Arm Holdings shares and a $6.5 billion credit facility.
The company is rated BB+ by S&P Global Ratings and Fitch Ratings, placing it at the top of speculative grade. Fitch said SoftBank’s debt is expected to rise as it funds its commitments, although it expects the company to retain adequate liquidity and access to capital markets.
SoftBank’s financing strategy is increasingly tied to whether its OpenAI investment can eventually generate enough value and liquidity to support the debt used to fund it.
That creates a timing issue. OpenAI CEO Sam Altman has said the company will not go public this year, leaving investors watching for other ways SoftBank can eventually unlock value from its stake.
At the same time, SoftBank is borrowing when credit has become more expensive. Its dollar bond maturing in 2031 recently yielded 8.2%, compared with 6.7% in January, Bloomberg reported. The result is a financing model that can work if OpenAI’s value continues to rise, but becomes more demanding if AI spending, borrowing costs or market sentiment move against SoftBank.
What this means for AI users
For people using ChatGPT and other AI products, the bond sale does not immediately change prices, features or access.
Its importance is further upstream: SoftBank is providing capital for an OpenAI investment at a time when OpenAI is committing enormous sums to computing infrastructure. The Financial Times reported that OpenAI expects to burn almost $280 billion through 2030 as it expands access to computing power.
That spending supports the servers and infrastructure needed to run increasingly capable AI systems, potentially creating opportunities for data center operators, cloud providers, integrators and managed service providers. However, SoftBank’s borrowing also increases the financial pressure behind that expansion. If financing becomes substantially more expensive or OpenAI’s valuation weakens, investors could push SoftBank and its infrastructure partners to prioritize near-term returns over aggressive growth. For channel partners, the key question is whether billions in new financing translate into operational computing capacity and sustainable customer demand.