SoftBank Raises $11.87 Billion Loan for OpenAI Bet as Shares Fall 13%

SoftBank Group has secured an $11.87 billion two-year loan to fund its investment in OpenAI, exceeding its original $10 billion target, according to a Bloomberg report citing people familiar with the matter. The Japanese conglomerate finalised the facility last week with commitments from around 20 banks. SoftBank declined to comment.

Investors responded poorly. SoftBank shares fell as much as 13% on Monday, their steepest single-day drop since 17 July.

A Growing Pile of Debt

The loan is the latest in a series of financing moves tied to the company’s OpenAI position. SoftBank has also taken a $10 billion margin loan backed by its OpenAI stake, and is weighing a bond sale of up to $20 billion.

Separately, the company said last week it would repay the remaining $25.9 billion on a $40 billion loan taken earlier this year, with payment due on 15 September. That borrowing was unsecured and had been scheduled to mature in March.

According to Bloomberg calculations, SoftBank has raised roughly $37 billion this year through domestic and offshore bonds and loans, including the new facility.

A $65 Billion Commitment

SoftBank, founded and led by Masayoshi Son, plans to invest close to $65 billion in OpenAI by October.

The company is scheduled to meet investors in New York this week to gauge appetite for a US dollar high-yield bond sale, with a target of between $10 billion and $20 billion.

Why the Timing Matters

The financing arrives as senior figures in the AI industry call for slower development. OpenAI chief executive Sam Altman told Fortune that the company would not pursue a public listing this year while it works through safety concerns.

That leaves SoftBank’s stake valued against a private funding round rather than a public share price — a point of concern given that part of its borrowing is secured against the OpenAI holding itself.

Source: Bloomberg, via The Japan Times and Business Standard.