SoftBank Doubles Down on OpenAI With Massive $10 Billion Investment

Kieron Allen (0:00)

Hi, I'm Kieran Allen, co-host of Cloud Wars. Now, it's fair to say that we're at an interesting inflection point when it comes to how AI innovation is set to progress, what might constrain it and where eventually lines may be drawn. However, that hasn't slowed planned investment in some of the biggest US firms.

Most recently, Japanese investment judge SoftBank has announced that through the issuance of senior unsecured bonds, it will be borrowing over $11 billion to help fund the planned $10 billion investment in OpenAI. $10 billion of the new bonds will be issued in US dollars, with another $1 billion issued in Euros. This is SoftBank's third challenge of its follow-on investment in OpenAI, with the $10 billion payment expected to close on October 1st. It's a very significant amount, and if the bond sale is completed at this planned size, it will be the largest corporate bond deal by a non-financial company ever recorded in Asia Pacific and Japan. Now, a quick note here, despite its name, SoftBank isn't a bank, it's primarily an investment holding company and tech investor. So I think the interesting thing here is that SoftBank isn't just investing $10 billion of spare cash into OpenAI, it's borrowing billions from the bond market to help fund the investment.

Effectively, using debt to finance this continued relationship with OpenAI, and at the very least, that signals a significant level of confidence in the company. Thank you for watching.