SoftBank Group is preparing to take on a massive amount of debt to fuel its artificial intelligence ambitions. The Japanese tech conglomerate is currently trying to secure a loan of up to $40 billion, Sources say the main goal of this huge loan is to fund the company’s ongoing investment in OpenAI, the creator of ChatGPT.
The loan would be structured as a “bridge loan” with a fairly short timeline, lasting about 12 months. According to the report, four major lenders, including Wall Street giant JPMorgan Chase, are working to underwrite the deal.
This financial move highlights just how deeply SoftBank Chief Executive Masayoshi Son believes in the future of AI. Son has practically gone “all in” on OpenAI, shifting the massive resources of his company toward the AI leader. By the end of last year, SoftBank had already built up an 11% ownership stake in the startup.
The timing of this loan is crucial. OpenAI is currently laying the groundwork for what could be the biggest initial public offering (IPO) in history. Experts believe the company could be valued at an astonishing $1 trillion when it finally hits the stock market.
To get there, OpenAI needs an incredible amount of cash. Last month, the AI firm announced a plan to raise $110 billion in a new funding round. That deal would value the company at $840 billion. As part of that round, SoftBank pledged to invest another $30 billion. They aren’t alone in making massive bets; chipmaker Nvidia also pledged $30 billion, while Amazon promised a staggering $50 billion.
By securing this $40 billion loan, SoftBank is ensuring it has the cash on hand to fulfill its promise to OpenAI and maintain its influential position at the center of the AI revolution.
