SoftBank credit risk highest since 2022 as insurance costs jump
SoftBank's credit risk just hit its highest level since 2022, as investors get nervous about the company's big (and expensive) AI investments.
The cost to insure against a SoftBank default jumped sharply this week, signaling real concern over how much money the tech giant is pouring into artificial intelligence.
SoftBank borrows to fund $64.6B AI
SoftBank has gone all-in on AI, with $64.6 billion in AI investments and a huge stake in Arm. But to fund these moves, it's taken on a lot of debt, especially after OpenAI delayed plans for an IPO.
On top of that, the recent US elections have sparked worries about slower growth for AI infrastructure in some states, which could make things even tougher for companies like SoftBank that rely on borrowed money to keep building.
Investors are keeping a close eye on whether these bold bets will pay off, or backfire.