To bet on OpenAI, SoftBank plans to issue up to $20 billion in bonds as early as September.

SoftBank Group is seeking to refinance its massive bet on OpenAI through a large-scale bond issuance, reflecting the tech giant's growing demand for financing in the field of artificial intelligence, but also exacerbating concerns about credit risk.

According to a Bloomberg report on the 26th, sources familiar with the matter revealed that SoftBank is in talks with several investment banks regarding a bond issuance of $10 billion to $20 billion. Part of the proceeds will be used to repay a $40 billion bridge loan obtained earlier this year for its investment in OpenAI. The issuance could be finalized as early as September, and the bonds may be denominated in both US dollars and euros. The sources indicated that negotiations are ongoing and specific details are subject to change.

This potential bond issuance is part of a series of financing operations by SoftBank to support its nearly $65 billion investment commitment in OpenAI, further joining the wave of corporate fundraising for artificial intelligence. At the same time, significant concerns remain regarding the rising credit risk and ultimate return prospects of such investments.

Refinancing pressure: RMB 40 billion in bridge loans outstanding.

According to Bloomberg, citing sources familiar with the matter, SoftBank, the junk-rated company founded and CEO Masayoshi Son, plans to invest nearly $65 billion in OpenAI by October this year, with some of the funding coming from loan financing.

To this end, SoftBank arranged a $40 billion bridge loan earlier this year as a temporary financing tool for the aforementioned investments. The proposed bond issuance is intended to refinance this bridge loan, replacing it with longer-term, more stable debt instruments to alleviate short-term debt repayment pressure.

According to sources, the bond issuance is expected to be between US$10 billion and US$20 billion, denominated in both US dollars and euros, and could be completed as early as September this year.

SoftBank is currently in discussions with several investment banks regarding the aforementioned plan. Sources familiar with the matter emphasized that negotiations are still ongoing, and the final size, currency structure, and issuance timing are all subject to adjustment.

Credit Risk Controversy Behind the AI Financing Boom

SoftBank's bond issuance is a microcosm of the recent wave of large-scale financing in the corporate world surrounding artificial intelligence. Many companies are vying to raise funds in the debt market to deepen their presence in the field.

However, according to Bloomberg, market concerns about this trend are also building simultaneously – the continued rise in credit risk and whether these massive investments can truly deliver returns remain core concerns for investors. SoftBank itself holds a junk-rated credit rating, and if it successfully completes this large-scale bond issuance, it will further test its balance sheet and become an important benchmark for the market to gauge investors' risk appetite for AI-related themes.

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