Japanese multinational investment holding company, SoftBank is moving aggressively to secure a $22.5 billion funding commitment to OpenAI by the end of the year, relying on a mix of asset sales, borrowing options and delayed dealmaking as it seeks to strengthen its position in the global artificial intelligence race.
According to Reuters, the funding effort represents one of the most ambitious bets yet by SoftBank founder and CEO Masayoshi Son, who has increasingly centered the Japanese conglomerate’s strategy around AI. To raise cash, SoftBank has already sold its entire $5.8 billion stake in Nvidia, reduced its holdings in T-Mobile US by $4.8 billion and cut staff as part of broader cost-control measures.
According to media reports, Son has also slowed most new dealmaking at SoftBank’s Vision Fund, requiring his personal approval for any transaction exceeding $50 million. Investment managers within the fund have been redirected toward supporting the OpenAI transaction, underscoring the scale and priority of the commitment.
SoftBank is also exploring other ways to generate capital. The group is preparing to take public PayPay, its payments app operator, in what is expected to be one of Japan’s largest listings. The initial public offering, originally planned for later this year, was delayed in part due to regulatory disruptions in the United States and is now expected in the first quarter of next year. People familiar with the plans said the listing could raise more than $20 billion.
In addition, SoftBank is seeking to monetize some of its holdings in Didi Global, the Chinese ride-hailing company that is preparing for a Hong Kong listing after being forced to delist from U.S. markets in 2021. The conglomerate has also retained flexibility through its balance sheet, including cash reserves, stakes in publicly listed firms and the option to issue corporate bonds or arrange bridge loans.
A major source of potential funding lies in SoftBank’s margin loans secured against its ownership stake in Arm Holdings. The group recently expanded its undrawn margin loan capacity to $11.5 billion, benefiting from Arm’s sharp rise in market value since its initial public offering. Arm’s shares have more than tripled from their IPO price, giving SoftBank additional collateral to support further borrowing.
As of the end of September, SoftBank reported parent-level cash of 4.2 trillion yen, equivalent to about $27 billion. It also continues to hold roughly 4% of T-Mobile US, a stake valued at around $11 billion at that time. Despite a slower overall pace of investing, SoftBank has continued to back select AI startups, including Sierra and Skild AI.
The urgency surrounding the OpenAI funding highlights the mounting financial pressure facing even the world’s largest investors as they compete to finance AI infrastructure projects that are expected to cost hundreds of billions of dollars. Both SoftBank and OpenAI are investors in Stargate, a $500 billion initiative aimed at building large-scale AI data centers to support model training and inference. Executives have described the effort as critical to maintaining U.S. leadership in AI amid rising competition from China.
The race to build data centers has also drawn in major technology companies such as Meta Platforms, which have committed unprecedented sums to secure chips, power supplies, cooling systems and servers. These investments have raised concerns among analysts about whether future returns will justify the scale of spending, reviving fears of a potential AI investment bubble.
Under an agreement reached earlier this year, SoftBank committed to invest up to $30 billion in OpenAI, with $10 billion paid in April. The remaining funding was contingent on OpenAI completing its transition to a for-profit corporate structure, a step the company finalized in October. Sources said OpenAI expects to receive the outstanding funding by the end of 2025, as stipulated in the contract.
The investment has become even more significant as OpenAI’s valuation has surged. Since SoftBank agreed to invest at a valuation of about $300 billion, OpenAI has been in discussions with other investors, including Amazon, about additional funding that could push its valuation close to $900 billion. Such an increase would represent a substantial paper gain for SoftBank once the transaction is completed.
The new capital is critical for OpenAI as it faces rising costs to train and operate advanced AI models amid intensifying competition. The company is scaling up computing capacity to support its products, including ChatGPT, while rivals such as Google accelerate their own AI deployments. OpenAI executives have acknowledged the growing urgency to improve performance and efficiency as the competitive landscape tightens.
SoftBank declined to comment on the funding plans. The outcome of the effort is likely to shape not only SoftBank’s future but also the broader trajectory of AI development, as investors weigh the enormous capital requirements against the promise of transformative technological gains.
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