The stock of the Japanese holding company SoftBank plummeted nearly 10 percent on the Tokyo Stock Exchange after negotiations with creditors to raise $6 billion through a loan secured by its stake in OpenAi stalled. This is reported by Bloomberg, which also recalls how the holding had already revised down its initial target (it was aiming to raise much more: $10 billion) and how it is now considering various alternatives.
WHAT’S HAPPENING WITH OPENAI?
It is unclear why negotiations with financiers have stalled. According to Bloomberg sources, SoftBank had secured commitments for $5 billion: however, it is not known whether these were verbal or formal commitments. It seems that some investors have doubts about SoftBank’s exposure to OpenAi, which amounts to over $60 billion, at a time of difficulty in competition with Anthropic, another artificial intelligence startup that recently reached a higher valuation: $965 billion, compared to OpenAi’s $852 billion.
OpenAi, on the other hand, seems closer to an initial public offering: the stock market listing in the United States could indeed take place in the fall, and the startup is working with banks Goldman Sachs and Morgan Stanley.
SOFTBANK BETWEEN INVESTMENTS AND DEBTS
If OpenAi’s initial public offering does indeed take place this year, SoftBank could sell part of its stake and use it to reduce its debt. By March 2027, in fact, the holding must repay a $40 billion bridge loan that was used to support investments in the creator of ChatGpt.
At the same time, the holding is carrying out an ambitious investment plan in artificial intelligence to position itself best in this sector. In March, for example, it announced a large computing hub in Ohio with 10 gigawatts of capacity, powered by a gas plant. A year ago, it joined the OpenAi infrastructure initiative Stargate, valued at $500 billion. More recently, it said it wants to invest up to $75 billion in France for the construction of data centers that will transform the country into the “main European hub for next-generation digital infrastructures.”
SoftBank had stated that it would repay the loan “through the use of existing assets and other financing measures.” The holding could therefore issue bonds, or it could leverage other holdings in its portfolio: it owns, for example, stakes in Arm and Intel, two semiconductor companies whose shares have both risen by over 190 percent this year.
HOW IS SOFTBANK DOING
Despite today’s crash, SoftBank’s stock has grown significantly since the beginning of the year, with a 45.5 percent increase year-on-year. On June 1, the holding also became the Japanese company with the largest market capitalization, surpassing the car manufacturer Toyota.
Also, the cost of SoftBank’s debt insurance against credit risks has decreased: in recent weeks its credit-default swaps have fallen by about sixty-one basis points to 307, compared to the peak of 367 points recorded on May 20.
