Japan’s SoftBank secures $11.87 billion loan for investments in OpenAI
Japanese conglomerate SoftBank Group has secured a two-year loan of $11.87 billion to support investments in U.S. artificial intelligence company OpenAI. The financing volume exceeded the initial $10 billion target, The Japan Times reports, citing people familiar with the matter.
According to the sources, the deal was concluded last week. Around 20 banks provided commitments for the loan. SoftBank declined to comment.
New borrowings
This loan complements a series of debt raisings by SoftBank related to the company’s investments in OpenAI. They include a $10 billion margin loan secured by SoftBank’s stake in OpenAI, as well as a potential bond offering of up to $20 billion.
Last week, SoftBank said it would repay the remaining balance on a $40 billion loan it obtained earlier this year to finance investments in OpenAI. According to the company’s statement, it planned to pay $25.9 billion on this unsecured loan on September 15. Its maturity was due to expire in March next year.
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Bond plans
This week, SoftBank is expected to hold meetings with investors in New York to gauge interest in a possible issuance of high-yield dollar bonds. According to the publication’s sources, the company is considering raising between $10 billion and $20 billion through such an offering.
Founded and led by billionaire Masayoshi Son, SoftBank plans to invest around $65 billion in OpenAI by October. According to Bloomberg calculations, since the start of the year the company has already raised the equivalent of about $37 billion through domestic and overseas bond issues and loans, including the new credit facility. On Monday, SoftBank shares fell by as much as 13%, their biggest decline since July 17.
The financing comes at a time when some executives are calling for a slowdown in artificial intelligence development because of the technology’s growing risks. OpenAI Chief Executive Officer Sam Altman said in an interview with Fortune that the company would not hold an initial public offering this year as it considers safety issues.
