SoftBank revives $10 billion loan talks backed by OpenAI stake with new repayment guarantee

SoftBank loan against OpenAI stake: SoftBank renews talks for $10 billion loan against OpenAI stake, adds concessions

To make lenders more comfortable, the Japanese technology investor is offering to guarantee repayment of the loan, giving banks recourse to SoftBank if the OpenAI shares pledged as collateral lose value, the people said. July 1 - SoftBank Group has reopened talks with a consortium of lenders for a $10 billion loan backed by its stake in OpenAI, after earlier attempts to secure a loan stalled over concerns about the difficulty of valuing private companies, two people familiar with the matter said. To make lenders more comfortable, the Japanese technology investor is offering to guarantee repayment of the loan, giving banks recourse to SoftBank if the OpenAI shares pledged as collateral lose value, the people said. The lending consortium is expected to include Goldman Sachs, JPMorgan Chase and Mizuho Financial Group, the people said. SoftBank ⁠and OpenAI ⁠did not respond to requests for comment. Goldman Sachs, JPMorgan and Mizuho declined to comment. The funding is part of SoftBank's efforts to finance its ambitious artificial intelligence investment strategy, the people said. The financing, known as a margin loan, acts like a line of credit. Initially, SoftBank asked for the loan to be backed solely by its stake in the ChatGPT maker, but banks pushed back because they would have no claim on SoftBank beyond the shares if the collateral lost value, the people added. Under that structure, SoftBank would not have been obligated to repay the debt. The talks highlight lenders' greater caution toward loans backed ⁠by stakes in privately held companies, whose valuations are harder to assess and whose shares are more difficult to sell than publicly traded stock. was unable to determine whether lenders also have specific concerns about OpenAI's valuation. The ⁠valuation of major AI companies such as OpenAI and Anthropic has ballooned in the past years amid intensifying competition for leadership in artificial intelligence. SoftBank has become one of the world's biggest backers of OpenAI under founder Masayoshi Son's push to make the Japanese conglomerate a dominant investor in artificial intelligence. It has committed more than $60 billion to OpenAI and related AI infrastructure projects, including the Stargate data center venture announced alongside OpenAI and Oracle last year. SoftBank has relied heavily on debt and asset-backed financing to fund those investments. In recent months, the company has explored several financing options tied to its investment portfolio. Last year, it sought to raise a $5 billion margin loan backed by shares in chip designer Arm Holdings, whose stock has surged amid investor enthusiasm for AI. Unlike the OpenAI financing, the Arm loan was backed by shares in a publicly traded company, making the collateral easier for lenders to value and liquidate if necessary. SoftBank ⁠had previously sought to raise at least $10 billion through a margin loan backed by its OpenAI stake before reducing the target to about $6 billion, after encountering hesitation from lenders, Bloomberg News reported earlier. OpenAI confidentially filed for a U.S. initial public offering in June, which could ultimately make SoftBank's stake easier for lenders to value and eventually liquidate. SoftBank also faces a March 2027 deadline to repay a $40 billion bridge loan that helped to finance its OpenAI investment. SoftBank has said that borrowing would likely be repaid "through the utilization of existing assets and other financing measures." SoftBank's Son has accelerated the company's spending on AI this year, making investments spanning data centers, semiconductors and robotics as he seeks to position the conglomerate at the center of the industry's rapid expansion.

SoftBank Reopens Talks for $10 Billion Loan Backed by OpenAI Stake After Adding Repayment Guarantee to Ea

SoftBank Revises OpenAI-Backed Loan Structure SoftBank has reopened discussions with a consortium of lenders for a $10 billion margin loan secured by its investment in OpenAI, according to a Reuters report citing people familiar with the matter. The revised proposal reportedly includes a guarantee from SoftBank itself, allowing lenders to seek repayment from the Japanese technology investor if the value of the pledged OpenAI shares declines. The change marks a shift from the company's earlier structure, under which banks would have had recourse only to the collateral and not to SoftBank's broader assets. SoftBank did not immediately respond to Benzinga's request for comments. Why Banks Were Cautious About OpenAI Collateral The negotiations underscore lenders' reluctance to accept stakes in privately held companies as collateral because such assets are more difficult to value and liquidate than publicly traded shares. SoftBank had initially sought to secure the financing solely against its OpenAI investment, but lenders reportedly pushed back over concerns that the shares alone might not adequately protect them if their value declined. SoftBank's AI Spending Continues to Accelerate The financing forms part of founder Masayoshi Son's aggressive artificial intelligence investment strategy. OpenAI has confidentially filed for a U.S. initial public offering in June, a move that could eventually make SoftBank's stake easier to value and use as collateral. Meanwhile, SoftBank faces a March 2027 deadline to repay a $40 billion bridge loan used to help finance its OpenAI investment. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: NYCStock on Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

SoftBank gains as report says it revives $10 billion OpenAI-backed loan talks By Investing.com

Investing.com -- SoftBank Group shares rose on Thursday after a Reuters report said the Japanese technology investor had resumed negotiations for a $10 billion loan backed by its stake in OpenAI, reviving a financing plan aimed at supporting its aggressive artificial intelligence investment strategy. SoftBank Group Corp. (TYO:9984) shares climbed 2.3% to ¥6,137, outperforming Japan's broader market, with the Nikkei 225 rising about 0.5%. Track AI investments, major financing deals and global tech leaders with InvestingPro According to Reuters, SoftBank has returned to discussions with a consortium of lenders after earlier talks stalled because banks were reluctant to accept shares in the privately held ChatGPT developer as the sole collateral for the financing. To address those concerns, Reuters reported that SoftBank is now offering a corporate guarantee that would allow lenders to seek repayment from the company if the pledged OpenAI stake proves insufficient to cover the loan. Goldman Sachs, JPMorgan Chase and Mizuho Financial Group are expected to participate in the lending group, according to the report. The proposed margin loan forms part of SoftBank founder Masayoshi Son's broader push to expand the conglomerate's exposure to artificial intelligence. Reuters said the company has committed more than $60 billion to OpenAI and related AI infrastructure initiatives, including the Stargate data center venture, while increasingly relying on debt and asset-backed financing to fund those investments. Reuters noted that lenders have taken a more cautious stance toward loans secured by stakes in privately held companies because such assets are harder to value and sell than publicly traded shares. SoftBank had previously reduced its financing target after encountering resistance from potential lenders, the report said. An eventual public listing by OpenAI, which confidentially filed for a U.S. initial public offering last month, could make the investment easier to value and potentially improve its usefulness as collateral, Reuters added.