SoftBank Secures $21 Billion in Fresh Debt to Power Its $65 Billion OpenAI AI Investment Push

SoftBank is orchestrating one of the largest debt-fueled AI investment campaigns in corporate history. The Japanese conglomerate led by billionaire Masayoshi Son has secured nearly $21 billion in fresh borrowings and is pursuing an additional $11 billion through what would be one of the biggest junk bond sales ever—all to finance its escalating AI investments, particularly its $65 billion commitment to OpenAI1

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SoftBank Expands Margin Loan Backed by Arm Holdings Shares

SoftBank increased its margin loan backed by shares of chip designer Arm Holdings by $5 billion to $25 billion, marking the third time the company has upsized this facility. The margin loan—where a borrower uses investments like stocks as collateral—began as an $8.5 billion facility in 2023, was increased to $13.5 billion in 2024, and then to $20 billion last year1

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. The deal drew strong demand, helped by the 142% spike in Arm's share price this year. As of May, SoftBank's loan was secured by 769 million shares of Arm, representing a 72% stake in the chip designer1

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The loan remains priced at an interest margin of about 225 basis points over the benchmark Secured Overnight Financing Rate and a credit adjustment spread of 25 basis points. SoftBank was initially looking to increase the facility by $3 billion to $5 billion but received about $7 billion in demand from lenders, suggesting robust market confidence despite rising borrowing costs1

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Apollo Global Management Loan Expansion for Vision Fund 2

Apollo Global Management is in talks to boost the size of a loan to SoftBank by $3.6 billion to $9 billion from $5.4 billion. This NAV (net-asset-value) financing is backed by assets in SoftBank's Vision Fund 2 and provides additional capacity to finance the follow-on investment in OpenAI3

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. Apollo first extended this financing to SoftBank's venture capital arm in 2021 and increased it by $900 million last year4

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Vision Fund 2 has made more than 300 investments since inception and counts Masayoshi Son and SoftBank itself as the largest investors. The fund had more than $100 billion of committed capital as of February4

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. NAV loans allow private-capital firms to borrow against fund assets, providing a way to drum up cash without liquidating holdings.

Record-Breaking Junk Bond Sale to Finance OpenAI Bet

SoftBank is seeking the equivalent of more than $11 billion in what would be one of the biggest junk bond deals ever. The company is looking to issue $10 billion of dollar securities across three tenors and €1 billion ($1.1 billion) of euro notes across two maturities2

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. The money will be used in part to fund a follow-on investment in OpenAI expected to close next month2

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As part of its funding campaign this year, SoftBank has sold almost $15 billion in notes across currencies, making it the biggest junk-rated borrower in bond markets so far in 20262

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. SoftBank is rated at BB+ by S&P Global Ratings, the firm's highest speculative-grade rating—significantly lower than tech giants like Alphabet (AA+) and Amazon.com (AA)2

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Additional Credit Lines and Loan Facilities

Beyond the margin loan expansion, SoftBank recently secured an additional $450 million to an existing credit line, bringing the total to $6.5 billion. This facility involves more than 20 banks and carries an interest margin of 210 basis points over the benchmark Secured Overnight Financing Rate1

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. The firm also secured an $11.87 billion loan to support its OpenAI investment1

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SoftBank has been replacing its shorter-term loans with debt carrying longer maturities to strengthen its financial position. The company repaid this week the entire outstanding balance of $25.9 billion on a $40 billion one-year bridge loan that was used to fund its investment in OpenAI1

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. In August, it raised a $10 billion two-year loan using its OpenAI stake from lenders including Apollo1

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Rising Credit Risk and Market Volatility Concerns

The aggressive debt financing strategy comes amid growing market volatility and safety warnings about AI. The cost of insuring SoftBank's debt against default has risen to the highest in three years, reflecting investor concerns about the uncertain revenue payoff from multibillion-dollar AI projects2

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. Credit-default swaps have been increasing as broader concerns about safety issues around AI have flared4

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Borrowing costs across markets have increased as most major economies grapple with inflation. The yield on SoftBank's dollar bond maturing in 2031 climbed to 8.2% earlier this month, up from as low as 6.7% in January, as spreads have widened and underlying Treasury yields have risen2

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. In early March, S&P downgraded SoftBank's credit rating, citing that the additional investment would “further reduce SoftBank Group's financial capacity” and noting that OpenAI was one of its investments with the “weakest credit quality”3

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OpenAI Investment Strategy and IPO Uncertainty

SoftBank's fortunes have become increasingly intertwined with its ability to monetize its holding in OpenAI after committing close to $65 billion to ChatGPT creator2

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. Earlier this year, the firm made an additional follow-on investment of $30 billion in OpenAI, representing a 13% ownership interest3

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. At the time, SoftBank CEO Masayoshi Son called OpenAI "a clear leader" and emphasized conviction in its continued growth3

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However, OpenAI Chief Executive Officer Sam Altman's remarks that the company won't go public this year—a move that would increase the liquidity of SoftBank's investments—have been closely watched by investors2

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. The firm pushed the IPO to 2027 as it focuses on addressing safety issues4

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. Recent calls by heads of some of the world's biggest artificial intelligence platforms, including OpenAI, to slow AI advances on safety concerns have introduced another layer of uncertainty2

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Broader AI Acquisition Strategy

SoftBank has been on an acquisition spree beyond OpenAI. Recent purchases include ABB Ltd.'s industrial robotics business for $5.4 billion and data center-focused private equity firm DigitalBridge Group Inc. for about $3 billion in cash1

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. This positions SoftBank at the epicenter of debates about the future of debt-fueled bets on AI, joining tech giants including Oracle Corp. and Meta Platforms Inc. that are pouring unprecedented amounts of capital into AI technologies and infrastructure1

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Watch how SoftBank manages its expanding debt load as borrowing costs rise and revenue certainty from AI investments remains unclear. The delayed OpenAI IPO timeline and increasing safety concerns around AI development could test investor patience with debt financing AI ventures. Monitor whether high-yield offerings in the AI sector continue attracting strong demand or if credit risk concerns begin constraining capital availability for ambitious AI bets.