"Masayoshi Son goes all out!" SoftBank plans to invest up to $30 billion more in OpenAI.

SoftBank is in talks with OpenAI for an additional investment of up to $30 billion, which would significantly increase its stake in the maker of ChatGPT. This move highlights founder Masayoshi Son’s ambition to play a central role in artificial intelligence, but has also heightened market concerns about SoftBank's financial pressure.

On January 27, according to sources cited by the Wall Street Journal, this potential investment would be part of OpenAI’s fundraising round that is aiming for up to $100 billion. If all funds are successfully raised, OpenAI’s valuation could reach $830 billion. SoftBank invested $22.5 billion in OpenAI last December, acquiring an 11% stake and becoming one of its largest shareholders.

Asymmetric Advisors' Japan equity strategist Amir Anvarzadeh said, “Although ChatGPT faces fierce competition from rivals like Google’s Gemini and its outlook is less optimistic than before, ‘Masayoshi Son is going all in, betting his entire fortune.’”

After the news broke, SoftBank’s share price in the Tokyo market once soared 8.8% on Wednesday, before trimming its gain to 3.7%. Analysts pointed out that Japanese retail investors see SoftBank as a proxy for investing in OpenAI, but OpenAI faces intensifying pressure from rivals like Google Gemini.

However, the report notes that S&P Global Ratings warned earlier this month that SoftBank’s aggressive investments in AI, combined with Arm’s sharp stock decline at the end of last year, are putting pressure on its credit profile. Some analysts note that if SoftBank commits to an additional $30 billion investment, its adjusted loan-to-value ratio could hit the 35% downgrade trigger point. The deal may require asset sales and margin loans of at least $15 billion to keep its reported loan-to-value ratio below 25%.

Masayoshi Son “All In” on Artificial Intelligence

SoftBank Chairman Masayoshi Son is adjusting asset allocation to raise funds for OpenAI and broader AI investments.

According to Reuters, to complete the $41 billion investment in OpenAI last December, Masayoshi Son had to urgently raise funds, causing other SoftBank Vision Fund transactions to nearly stall.

According to a previous article by Wall Street CN, SoftBank has sold all its shares in Nvidia, cashing out $5.8 billion to invest in OpenAI. The company also reduced its stake in T-Mobile US, and used Arm shares to expand margin loans. In addition, SoftBank has recently suspended talks to acquire US data center operator Switch.

According to Bloomberg, Masayoshi Son has significantly increased his bets in artificial intelligence over the past year. SoftBank acquired US chip design firm Ampere Computing for $6.5 billion and announced a $5.4 billion acquisition of ABB's robotics division.

Ortus Advisors' Japan equity strategy head Andrew Jackson pointed out that SoftBank’s stock has “clearly underperformed” in recent weeks. He commented: “As a high beta laggard, headlines like this will attract investors to enter the market.”

However, Bloomberg Intelligence analysis pointed out that if SoftBank commits to an additional $30 billion investment in OpenAI, its BB+ rating could come under pressure. Even assuming its current stake in OpenAI is revalued upward, the adjusted loan-to-value ratio could hit the 35% downgrade trigger point.

OpenAI Seeks Large-Scale Funding

OpenAI is facing enormous funding pressures for the continued development of AI models, paying huge computational costs, and retaining top researchers in an increasingly competitive market. According to previous reports from the Wall Street Journal, the company is seeking to raise up to $100 billion in new capital from investors.

Citing Bloomberg sources, OpenAI CEO Sam Altman has been meeting with top Middle Eastern investors to raise funds for the new round. The scale of this round could reach at least $50 billion, with a valuation between $750 billion and $830 billion. Insiders say the talks are still at an early stage and the amounts may change.

OpenAI’s existing investors include Thrive Capital, Khosla Ventures, and UAE sovereign wealth fund MGX. The company is also considering an initial public offering, and plans to raise funds from Middle Eastern sovereign wealth funds and other venture capital funds.

SoftBank and OpenAI are both investors in the Stargate project, a $500 billion plan aimed at building AI data centers for training and inference.

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