SoftBank is betting big on OpenAI to get financial support again! Preliminary subscription of over 20 billion US dollars of junk bonds, with a maximum yield of 10%

The Zhitong Finance App learned that SoftBank Group Corp. (SoftBank Group Corp.), headed by legendary investor Sun Zhengyi, is focusing SoftBank's capital allocation on AI application leader OpenAI and the AI computing power infrastructure construction process behind it. According to media reports, people familiar with the matter said that the SoftBank Group's issuance, which is expected to become one of the largest junk bond transactions in global bond history, has attracted more than 20 billion US dollars in initial subscription demand. Investors are scrambling to lock in the record yield this offering could provide, and the funding will be used to support the Japanese investment giant's large-scale investment in OpenAI.

According to a disclosure announcement from SoftBank, after completing this round of additional investment, the cumulative investment in OpenAI is expected to reach US$64.6 billion and hold approximately 13% of the shares; at the same time, SoftBank is raising funds through its Arm stock (ARM.US) pledge loans, bank credit, and large-scale bond issuance, and is working with partners such as Oracle to accelerate the “Stargate” (Stargate) AI data center construction project, which can be called the “Manhattan Project.”

As early as 2000, Sun Zhengyi first invested in Alibaba with about 20 million US dollars. Later, through long-term shareholding, he shared the record huge value growth of Chinese e-commerce platforms from the stage of huge losses in the early stages of entrepreneurship to the spotlight of the global capital market, which can be called an “investment myth.” Today, in his opinion, Sun Zhengyi's huge investment in OpenAI also has unparalleled growth potential to become a large-scale user portal and enterprise technology platform.

Demand is exploding! SoftBank junk bond issuance attracted more than $20 billion in initial subscription intentions

People familiar with the matter said that the SoftBank Group's issuance, which is expected to become one of the largest junk bond transactions in history, has attracted more than 20 billion US dollars in initial subscription demand. Investors are scrambling to lock in the record yield this offering is likely to provide, and the funding will be used to support the company's investment in OpenAI.

The above sources said that these potential demands reflect investors' early, non-binding subscription intentions. They are a preliminary measure of demand before pricing, and are still expected to be priced on Thursday. Since the discussion was a private matter, these individuals requested anonymity.

Other people familiar with the matter said on Monday that SoftBank is seeking to raise more than 11 billion US dollars in equivalent capital through this transaction, including the US dollar portion of 10 billion US dollars, and the 1 billion euro portion, or about 1.1 billion US dollars of euro portion. They added that there is no upper limit on the distribution scale, and no final decision has been made yet.

In response to questions via email, a SoftBank representative said, “The scale of our initial issuance is 10 billion US dollars and 1 billion euros.” “The deal is going very well and demand is strong. Any other claims about the size of the deal at the moment are pure speculation, and we have no plans to expand the scale of this offering.”

The group, owned by billionaire Sun Zhengyi, has promised to invest nearly $65 billion in ChatGPT developer OpenAI, plus its other investments in this field, making SoftBank one of the world's largest investors in artificial intelligence. At a time when the potential and risk of AI are increasing global market fluctuations, these factors have made SoftBank's junk bond transaction one of the most important tests to date to test investors' attitudes towards AI.

Other people familiar with the matter said on Monday that SoftBank and its lead bank had previously been surveying investors with the potential pricing for this transaction. The dollar portion with the longest maturity is the 7.5-year bond, and the maximum potential yield under discussion is about 10%; the longest-maturing euro portion is a 6-year term, with a yield discussion level of about 8.5%.

If pricing is ultimately based on these levels, the exploratory inquiry level described above and the inquiry level for various other bonds will all set yield records in the corresponding currencies and terms. However, the details are subject to change, and the deal has yet to enter the so-called preliminary price guidance phase. This stage is usually closer to the actual pricing time, and the initial price guide itself is not necessarily the final pricing level.

People familiar with the matter said that SoftBank held a conference call for global investors on Monday and will continue on Tuesday.

Citigroup is the lead bookkeeping manager for the US dollar portion and is the co-global coordinator with Goldman Sachs Group, J.P. Morgan Chase, and Morgan Stanley. J.P. Morgan Chase is the lead bookkeeping manager for Euro-denominated bonds and is a joint global coordinator with Goldman Sachs and Deutsche Bank.

Citibank, Goldman Sachs, J.P. Morgan Chase, and Deutsche Bank declined to comment, while Morgan Stanley did not immediately respond to requests for comment.

As SoftBank expands its AI financing capabilities, the latest deal is yet another in the company's recent series of intensive financing activities.

The group signed a $40 billion bridge loan arrangement in March to support its additional investment in OpenAI, and recently repaid the outstanding balance of $25.9 billion under the loan arrangement.

As of the end of last week, the group had obtained or was raising close to $21 billion in potential additional loans. People familiar with the matter said on Friday that the group will increase the size of margin loans secured by shares of its chip company Arm Holdings by 5 billion US dollars to 25 billion US dollars. Additionally, SoftBank recently increased an existing credit line by 450 million US dollars, bringing the total to 6.5 billion US dollars.

Apollo Global Management is also in talks to increase the loan size provided to SoftBank by 3.6 billion US dollars to 9 billion US dollars to help SoftBank raise funds for its investment in AI giant OpenAI. According to people familiar with the deal, in addition to this, the company founded and led by billionaire Sun Zhengyi also received a loan of 11.87 billion US dollars, which was also used to support its investment in OpenAI.

According to data compiled by Bloomberg, as part of this year's financing campaign, SoftBank has issued nearly $15 billion worth of bonds denominated in different currencies, making it the largest garbage borrower in the bond market since 2026. Earlier this year, SoftBank also received a $10 billion loan secured by its OpenAI holdings.

These deals come at a time when most major economies are struggling to cope with inflation, and borrowing costs are generally rising in various markets. According to data compiled by Bloomberg, the yield on SoftBank's US dollar bonds due in 2031 rose from a low of 6.7% in January to 8.2% earlier this month as credit spreads widened and the yield on US Treasury bonds, which is the benchmark for pricing, rose.

Recently, the heads of some of the world's largest artificial intelligence platforms, including OpenAI, called for a slowdown in AI progress due to security concerns, which added another layer of uncertainty. This factor has contributed to the recent rise in the cost of SoftBank debt default insurance to its highest level in three years.

OpenAI CEO Sam Altman's remarks that the company will not go public this year have been closely watched by investors; listing would have increased the liquidity of SoftBank's investments.

Both S&P Global Ratings and Fitch Ratings give SoftBank a BB+ rating, which is the highest speculative rating for each of the two institutions. In contrast, in 2026, Alphabet and Amazon, the two largest corporate bond issuers, received AA+ and AA ratings respectively, both higher than Japan's sovereign rating.

From the myth of Ali to OpenAI: betting on the next generation of globally popular “super platforms”

SoftBank's large-scale AI financing can still attract considerable demand for bond investment, but investors are also demanding higher capital returns. The 10 billion US dollars and 1 billion euro bonds to be issued have attracted initial subscription intentions of more than 20 billion US dollars; the maximum 7.5 year dollar portion tested a yield of about 10%, while the maximum 6-year euro portion was inquired at the level of about 8.5%.

Therefore, the latest subscription popularity can be described as an indication that global credit capital is still willing to participate in SoftBank's AI expansion, but this 20 billion US dollars is currently a non-binding intention, and about 10% is not yet the final issuance yield. If the transaction is successfully completed, SoftBank's medium- to long-term financing channels will be further broadened to provide financial support for the continued fulfillment of OpenAI's investment commitments.

Sun Zhengyi actively lends and pledges Arm shares, and has a clear funding arrangement logic: using existing assets to support financing and aim to complete the investment at a critical stage in the expansion of AI platforms and computing power resources. According to the July announcement, SoftBank plans to invest another 10 billion US dollars in OpenAI on October 1; in September, it also announced early repayment of the outstanding balance of 25.9 billion US dollars under the bridge loan, so the current financing also involves subsequent investment and financing restructuring. Equity pledges can obtain capital while retaining shareholding, and bonds can help extend the financing period. Derived from the perspective of the AI data center construction process that is in full swing around the world, power access, park development, chip procurement, and cluster deployment all require early investment and timely implementation of funds, which helps transform long-term AI demand judgments into actual delivery capabilities.

In 2000, Sun Zhengyi first invested in Alibaba with about 20 million US dollars. Later, through long-term shareholding, he shared the record huge value growth of Chinese e-commerce platforms from the stage of huge losses in the early stages of entrepreneurship to the spotlight of the global capital market, which can be called an “investment myth.” Today, in his opinion, OpenAI, which Sun Zhengyi has invested heavily in, also has unparalleled growth potential to become a large-scale user portal and enterprise technology platform — that is, betting that cutting-edge AI large-scale model capabilities, developer ecology, paid services, and enterprise workflows promote each other, and the commercialization space will fully expand as the scope of application expands.

This time, Sun Zhengyi also hopes to enhance the synergy of investment through industrial layout, that is, to identify platforms that may expand commercial boundaries over a long period of time and establish continuous supply capabilities around it: the development of OpenAI can bring models and application requirements, computing power infrastructure can meet these needs, and the chip and enterprise service business will seek commercial opportunities in it. Sun Zhengyi has emphasized more than once this year that what he is pursuing is multi-level value creation of “core platform equity value+computing power service revenue+industrial chain business growth”. SoftBank clearly stated in its investment announcement that the additional investment will not only support OpenAI's research and ecological expansion, but also advance its own ASI strategy.

The AI superplatform that SoftBank is now building is no longer a single point bet, but an increasingly complete “ASI integrated stack”: the bottom layer includes Arm architecture and Armself-developed data center CPUs; the middle layer includes GraphCore Ltd., a British AI chip design company fully acquired by SoftBank Group, and Ampere, which was officially acquired recently; the upper layer includes OpenAI, Stargate (or “Stargate”), and the enterprise-grade cloud AI computing power platform layout with Oracle, plus SB Neo, a new cloud power ( Neocloud); Meanwhile, Sun Zhengyi himself has already publicly stated that SoftBank's goal is to become the largest AI computing power and application-level basic platform provider under the “Super Artificial Intelligence” (ASI) era in the next ten years, and has adopted an almost “all in” aggressive investment attitude for ChatGPT developer and global AI model leader OpenAI. Oracle is mainly Stargate's cloud and infrastructure partner, while SoftBank's joint venture platform for enterprises is SB OpenAI Japan, which was co-founded with OpenAI.