SoftBank seeking $16.5B loan to fund AI projects amid fresh funding round at OpenAI: Report
This is one of the ways the Japan-based investment firm is exploring to finance its $500-billion AI infrastructure project in the United States.
SoftBank Group is planning to secure a $16.5 billion loan to fund its artificial intelligence investments in the United States, according to a Bloomberg report. Meanwhile, its biggest bet in AI, ChatGPT-maker OpenAI, has raised $40 billion from the Japan-based investment firm.
According to the report, which cites sources familiar with the matter, the bridge loan under discussion has a tenor of about 12 months. Talks with banks are in the early stages and may change over the coming weeks, the sources said.
SoftBank is exploring ways to finance the $500-billion AI infrastructure project in the US, Stargate —a joint venture between OpenAI, SoftBank, Oracle, and Emirati state-owned investment firm MGX Fund.
The report also said that the new bridge loan may help Masayoshi Son-led SoftBank to lead the $40-billion funding round in OpenAI.
Meanwhile, in a blogpost, the AI firm confirmed that it has raised $40 billion from Softbank, at a $300-billion post-money valuation.
“We’re excited to be working in partnership with SoftBank Group—few companies understand how to scale transformative technology like they do. Their support will help us continue building AI systems that drive scientific discovery, enable personalised education, enhance human creativity, and pave the way toward AGI that benefits all of humanity,” the blog post read.
During SoftBank’s third quarter earnings call, CFO Yoshimitsu Goto said the financing for the Stargate Project will be structured carefully, and its growth will slow, if necessary, in challenging debt markets.
The Stargate Project is set to deploy up to $500 billion over the next four years with an initial allocation of $100 billion.
Goto had said that the firm will look to secure project financing with plans to offer various debt products targeted at banks, insurers, pension funds, and other investors.
In the third quarter of FY24, SoftBank swung to a loss of 369.16 billion yen (around $2.4 billion), largely due to a sharp decline in the share prices of several of its major portfolio companies.
Edited by Swetha Kannan