SoftBank Group is moving quickly to arrange $22.5 billion in funding for OpenAI by the end of the year, using a mix of asset sales, cash reserves and borrowing options, according to people familiar with the matter. The Japanese conglomerate is under pressure to meet the commitment as global competition in artificial intelligence accelerates and funding needs surge.
The investment marks one of the boldest moves yet by SoftBank CEO Masayoshi Son. To raise funds, the company has sold its entire $5.8 billion stake in Nvidia, exited $4.8 billion worth of shares in T Mobile US and reduced staff. Deal activity at the Vision Fund has slowed sharply, with transactions above $50 million now requiring Son’s approval. SoftBank is also preparing an initial public offering of its payment’s unit PayPay, expected in the first quarter of next year after delays linked to a 43-day US government shutdown. The listing could raise over $20 billion.
SoftBank is also exploring exits from other holdings, including its stake in Didi Global, which plans a Hong Kong listing after being forced to leave US markets in 2021. Capital is being redirected toward the OpenAI deal, highlighting the strain even large investors face while financing large scale AI data centre projects. OpenAI expects to receive the remaining funding by the end of 2025, as agreed. SoftBank has access to several funding routes, including margin loans, bonds and cash on hand. It recently expanded margin loan capacity tied to its Arm Holdings stake to $11.5 billion, supported by Arm shares tripling since their IPO.
OpenAI needs the funding to manage rapidly rising costs as competition from Google intensifies. The company and SoftBank are both backers of Stargate, a $500 billion data centre initiative seen as vital to US leadership in AI. SoftBank agreed in April to invest up to $30 billion in OpenAI, with later payments linked to its shift to a for profit structure completed in October. OpenAI CEO Sam Altman has told staff the firm is now in a “code red” phase, prioritising ChatGPT improvements as it targets building 30 GW of computing capacity at a projected cost of $1.4 trillion.
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