Gamble to “renew ammunition” for Sun Zhengyi's AI! Following retail sales and overseas bonds, SoftBank plans to issue another 60 billion yen of new bonds this month

The Zhitong Finance App learned that in the context of the AI investment frenzy intertwined with market concerns, SoftBank Group (SFTBY.US) continues to accelerate its financing plans. According to lead underwriter Daiwa Securities, SoftBank plans to issue about 60 billion yen (about 369 million US dollars) of bonds to Japanese institutional investors in the week of July 27, including about 50 billion yen of 3-year bonds and about 10 billion yen of 5-year bonds. Nomura Securities and SMBC Nikko Securities are also participating in this issuance arrangement.

This is already the latest part of SoftBank's multiple funding rounds since this year. So far this year, SoftBank has raised 678 billion yen by issuing subprime bonds to retail investors, and entered the US and European bond markets one after another in April. Earlier, SoftBank submitted disclosure documents to regulators on July 2. It plans to issue a new round of corporate bonds targeting individual or institutional investors, with a maximum total issuance limit of 1.5 trillion yen, mainly to repay existing debts that are about to expire, optimize capital structures, and reserve liquidity for continued investment in AI and cutting-edge technology.

Masayoshi Sun's big AI gamble: $65 billion OpenAI bet

Behind SoftBank's intensive financing is founder Sun Zhengyi's unprecedented focus on artificial intelligence (AI). Up to now, SoftBank has invested a total of approximately US$65 billion in OpenAI-related projects. According to public information, in February of this year, SoftBank finalized an investment agreement for OpenAI in three installments in April, July, and October respectively — 10 billion US dollars was completed in April, July, and October, respectively — 10 billion US dollars was completed in April, the second transaction of 10 billion US dollars was completed on July 1, and the final 10 billion US dollars is expected to be completed in October. Prior to this round of investment, OpenAI's valuation had reached $730 billion.

Masayoshi Sun made it clear at the 46th Annual General Shareholders' Meeting of the SoftBank Group on June 24 that Arm (ARM.US) and OpenAI are SoftBank's core engines for achieving long-term goals. At the same time, he announced revisions to his previous plan to “hand over the ball in their 60s” and will continue to focus on the AI business for another 10 to 15 years as an operator. SoftBank's consolidated net profit for fiscal year 2025 (ending March 2026) surpassed 5 trillion yen, a record high.

However, huge investments are also accompanied by huge financial pressure. As of the end of 2025, SoftBank's interest-bearing debt in separate statements was approximately 16.3 trillion yen (about 104 billion US dollars). In March of this year, SoftBank received another $40 billion bridging loan to further invest in OpenAI.

AI return concerns and stock price pressure

As investment in AI infrastructure continues to accelerate, market concerns about the return on AI investment are growing. Recently, global AI-related stocks have continued to pull back sharply.

On Thursday, due to a new round of sharp decline in US chip stocks, Asian technology stocks fell sharply. By the close, SoftBank's stock price fell more than 9% on the same day, chip equipment manufacturer Tokyo Electronics fell more than 8%, and Edwin Testing fell more than 7%. On Wednesday, US stocks, the semiconductor index ETF-VanEck (SMH.US), fell nearly 4%, and SoftBank subsidiary Arm fell more than 5%.

Earlier, news about OpenAI's possible postponement of its IPO had already dealt a heavy blow to SoftBank's stock price. On June 26, there were reports that OpenAI would prefer to postpone the initial public offering until 2027, and SoftBank Group's stock price plummeted on the same day. Market analysts pointed out that SoftBank's total investment in OpenAI exceeds 60 billion US dollars. The latter's delay in listing means that the monetization cycle of this huge investment has been lengthened, and at the same time, it will also put financial pressure on the SoftBank Group.

Despite this, Sun Zhengyi scoffed at the AI bubble. On the previous “SoftBank World 2026,” he claimed that opponents of AI were “spitting in the sky,” and predicted that AI would contribute 20% of the total output of the global economy by 2040. Sun Zheng is convinced that AI will reshape the global economy. He estimates that in the next 15 years, AI will contribute $46 trillion to global GDP and generate annual profits equivalent to half of that figure.

Equity Pledges and Asset Mobility

In addition to issuing bonds, SoftBank is also exploring various financing channels. SoftBank has been considering margin loans using its OpenAI holdings as collateral. SoftBank sought at least $10 billion of such loans in April, but was blocked by banks' concerns about the difficulty of valuing private companies, then lowered its target to about $6 billion.

According to reports, SoftBank restarted negotiations on a $10 billion loan in early July. To dispel lenders' concerns, SoftBank proposed to provide a company guarantee — if the value of OpenAI shares used as collateral falls, banks can seek compensation from SoftBank. Consortiums expected to participate in the loan include Goldman Sachs, J.P. Morgan Chase, and Mizuho Financial Group.

In addition, SoftBank also raised capital by reducing or clearing its holdings. Since 2025, SoftBank has cleared its positions and cashed out US$5.83 billion when NVDA.US (NVDA.US) stock prices were high, and successively reduced its holdings of T-Mobile (TMUS.US) shares to cash out US$12.7 billion.

Rating outlook raised

On the eve of this bond issuance, S&P Global Ratings adjusted SoftBank Group's rating outlook from “negative” to “stable” on July 16, while maintaining the “BB+” long-term issuer credit rating (one level lower than the investment grade). S&P said that due to the sharp rise in Arm's stock price since the end of March 2026, SoftBank's key financial ratios have recovered to levels significantly higher than previously anticipated.

S&P estimates that by the end of June 2026, SoftBank's listed assets to loan value ratio had recovered significantly to more than 60%, and Arm shares accounted for more than 40% of SoftBank's investment assets. S&P also estimates that after completing an additional investment of 30 billion US dollars, OpenAI will account for 20% to 30% of SoftBank's investment assets, making it the second largest investment target after Arm.

However, S&P also warned that Arm's stock price will continue to be highly volatile, and SoftBank's high concentration on large investment targets (Arm alone accounts for about half of the asset value) will limit its credit quality.