SoftBank Group is racing to assemble a $22.5 billion funding commitment to OpenAI by the end of the year, turning to asset sales, balance-sheet cash and potential borrowing as founder Masayoshi Son doubles down on artificial intelligence, according to sources cited by Reuters. The push underscores the scale of Son’s latest wager as competition intensifies to dominate the next phase of AI development.
Reuters reported that SoftBank has already taken dramatic steps to raise cash, including selling its entire $5.8 billion stake in Nvidia, offloading $4.8 billion worth of shares in T-Mobile US and cutting staff. At the same time, Son has sharply curtailed new dealmaking at SoftBank’s Vision Fund, with any investment above $50 million now requiring his personal approval, according to two of the sources.
The funding drive has slowed most other strategic initiatives as SoftBank channels resources toward OpenAI. Investment managers at the Vision Fund are being redirected to focus on the AI startup, Reuters said, offering a rare glimpse into the financial strain faced even by the world’s largest investors as they try to bankroll AI infrastructure projects that could cost hundreds of billions of dollars.
SoftBank is also preparing to unlock additional capital through public markets. Its payments app operator PayPay is expected to go public in the first quarter of next year after a planned listing was delayed, partly due to a prolonged U.S. government shutdown. Sources told Reuters that the IPO could raise more than $20 billion. The conglomerate is also exploring ways to monetize its stake in Didi Global, the Chinese ride-hailing giant seeking a Hong Kong listing after being forced to delist from the U.S. in 2021.
Although OpenAI has not yet received the remaining funds, the contract stipulates that the money is due by the end of 2025, Reuters reported. SoftBank has several financing levers it can still pull, including issuing bonds, securing bridge loans, tapping cash reserves or drawing on margin loans backed by its valuable stake in Arm Holdings.
One of SoftBank’s most significant sources of potential funding is its undrawn margin loan capacity linked to Arm. According to Reuters, SoftBank recently expanded that capacity by $6.5 billion, lifting total available borrowing to $11.5 billion. Arm’s share price has tripled since its IPO, giving SoftBank additional collateral and room to raise further debt if needed.
As of the end of September, SoftBank held 4.2 trillion yen, or about $27.2 billion, in parent-level cash. It also remains the second-largest shareholder in T-Mobile US with roughly a 4% stake valued at around $11 billion, based on LSEG data. Despite its slower pace of investment, the group has continued to back select AI startups such as Sierra and Skild AI.
The urgency reflects OpenAI’s escalating capital needs. Both OpenAI and SoftBank are investors in Stargate, a $500 billion initiative to build massive AI data centers seen as critical to maintaining U.S. leadership in artificial intelligence. Reuters noted that similar spending sprees by tech giants such as Meta have fueled concerns that the sector may be heading toward an AI bubble if returns fail to match the scale of investment.
SoftBank agreed in April to invest up to $30 billion in OpenAI, with $10 billion paid immediately and the remainder contingent on OpenAI transitioning to a for-profit structure, a milestone the company reached in October. Since then, OpenAI’s valuation has surged, with talks reportedly underway that could lift it to nearly $900 billion, potentially delivering SoftBank a significant paper gain.
The new funding is vital as OpenAI faces intensifying competition from rivals such as Google. Reuters reported that CEO Sam Altman has warned employees the company is in a “code red” phase, prioritizing improvements to ChatGPT while delaying other products. Altman has outlined ambitions to build 30 gigawatts of computing capacity at a projected cost of $1.4 trillion, highlighting why SoftBank is under pressure to deliver on one of the largest AI funding commitments ever attempted.
