SoftBank raises $11.87B loan for OpenAI investment
What's the story
SoftBank Group has secured an $11.87 billion loan to fund its investment in US-based artificial intelligence (AI) firm OpenAI. The amount is higher than the initial target of $10 billion. According to Bloomberg, the Japanese conglomerate finalized the two-year facility last week with commitments from around 20 banks.
Financial strategy
SoftBank to repay $25.9 billion loan
SoftBank has also announced its plan to repay the remaining balance of a $40 billion loan it took earlier this year for investing in OpenAI.
The company intends to pay off the $25.9 billion due on September 15.
Meanwhile, SoftBank is planning meetings with investors in New York this week to gage interest for a potential US dollar junk-bond sale, aiming to raise between $10 billion and $20 billion from the bond offering.
Investment details
SoftBank's AI investment and credit risks
SoftBank, led by billionaire Masayoshi Son, is expected to invest nearly $65 billion in OpenAI by October.
The company has already raised some $37 billion this year through offshore and domestic bond sales and loans, including the latest facility.
This comes amid growing concerns over rising credit risks in the artificial intelligence sector.