Hours after it pumped in part of the $40Bn fundraise for OpenAI, SoftBank Group is now reportedly in talks to secure a loan of up to $16.5 billion to support its growing investments in AI across the US. If finalized, this would be the largest US dollar-denominated loan in the history of the Japanese conglomerate, reports Bloomberg.
The loan under discussion is structured as a bridge loan with a tenor of approximately 12 months. Discussions with financial institutions are still in the early stages, and the terms of the agreement could evolve in the coming weeks. People familiar with the matter, who have requested anonymity due to the private nature of the negotiations, have indicated that multiple banks are being approached to participate in the financing. The proposed bridge loan is also expected to contribute to SoftBank’s role in the latest (and record-breaking) $40 billion funding round for OpenAI. The investment round, which values OpenAI at approximately $300 billion, is the largest private funding effort ever undertaken in the AI sector.
The $16.5 billion bridge loan, if finalized, will surpass SoftBank’s previous largest dollar-denominated loan, which was a $10 billion margin loan secured in 2021. That loan was backed by the company’s shares in Alibaba Group Holding Ltd. and was arranged with participation from at least 14 banks.
To recap, bridge loans serve as temporary funding solutions and are typically used to provide liquidity while a company arranges for longer-term financing or awaits capital inflows from other sources. In this case, SoftBank is expected to use the funds to accelerate its AI expansion in the US, where it is actively investing in infrastructure such as data centers, robotics, and semiconductors. SoftBank has a track record of making investments in emerging technologies, particularly in AI and telecommunications. The company owns a significant stake in semiconductor firm Arm Holdings, which plays a crucial role in AI chip design. SoftBank has also previously invested in AI startups, including DeepMind before its acquisition by Google.
One of SoftBank’s most ambitious AI ventures is the Stargate AI project, a large-scale initiative focused on developing advanced AI infrastructure. The project is a joint effort involving OpenAI, Oracle Corporation, and Abu Dhabi’s MGX Fund. However, despite these partnerships, SoftBank remains the primary financial backer of the initiative. The Stargate project, which SoftBank has committed to building in US, is expected to deploy up to $500 billion over the next four years, as well as create over 100,000 jobs in the country. The first phase of the initiative is allocated $100 billion to construct high-performance data centers designed to support the latest AI models. SoftBank has positioned this effort as a step toward enabling next-generation AI applications, including artificial general intelligence (AGI), which aims to create AI systems capable of outperforming human intelligence across various tasks.
