SoftBank Seeks $10 Billion Loan to Refinance OpenAI Investment Debt

Japanese investment firm SoftBank Group Corp. is seeking a $10 billion loan to help refinance debt incurred from its high-profile investment in U.S.-based artificial intelligence giant OpenAI, according to sources familiar with the matter.

The proposed two-year facility carries an interest margin of around 275 basis points over the benchmark Secured Overnight Financing Rate. Mizuho Bank Ltd. is serving as the mandated lead arranger and bookrunner for the transaction, with lender commitments due by August 31.

This prospective credit facility forms part of a broader sequence of debt financing activities undertaken by SoftBank under the leadership of billionaire founder Masayoshi Son. The company is slated to invest close to $65 billion in OpenAI by October. Proceeds from the new loan could be used, in part, to repay a $40 billion bridge loan secured earlier in the year to fund these OpenAI-related commitments.

In addition to the $10 billion loan, SoftBank is exploring further capital-raising avenues. The firm is considering a bond offering ranging from $10 billion to $20 billion, alongside a planned record retail bond sale of ¥1 trillion (approximately $6.3 billion) in its home market of Japan. Earlier this month, SoftBank also secured a separate $10 billion loan backed by its OpenAI stake, which includes covenants that could require early repayment or the posting of cash under certain conditions.

SoftBank's intensive borrowing activity coincides with a broader global trend of heavy capital deployment into artificial intelligence infrastructure. U.S. technology companies and investors are planning to direct trillions of dollars into data centers and related AI infrastructure over the coming years. Market data indicates that companies have already borrowed over $410 billion in the bond markets alone during the current year to finance such facilities and AI-related investments.

"SoftBank's aggressive financing strategy highlights the staggering capital requirements needed to maintain positions in foundational artificial intelligence companies like OpenAI. Using a mix of bridge loans, upcoming bond sales, and stake-backed facilities demonstrates the immense financial leverage major tech investors are willing to deploy. However, as credit risks in the AI sector face increased scrutiny and financing costs rise, managing liquidity and debt covenants will remain a critical challenge for large-scale technology investors." — Dr. Shishir Gupta, Founder & CEO, StartupLanes