SoftBank Lowers OpenAI-Backed Loan Target to $6B Due to Lender Valuation Concerns
SoftBank has lowered its planned margin loan backed by its OpenAI stake from about $10 billion to roughly $6 billion after banks and private credit funds raised concerns regarding the deal’s structure and the complexities of valuing OpenAI, an unlisted AI unicorn.
Summary
SoftBank Group is scaling down a proposed margin loan supported by its OpenAI investment from approximately $10 billion to around $6 billion following objections from lenders.
Banking institutions and private credit funds have expressed worries about evaluating the worth of OpenAI, a private entity, and the financial structure involved.
The two-year loan, with an option for a one-year extension, was designed to facilitate SoftBank’s upcoming AI investments without liquidating its OpenAI shares.
SoftBank Group is rethinking an ambitious financing plan that aimed to secure around $10 billion using its OpenAI shares as collateral after lenders voiced reservations about both the margin loan structure and the private valuation underlying the deal.
As reported by Bloomberg and referenced by Reuters and other outlets, SoftBank and its arranging banks have considered a revised figure of “as low as $6 billion” in recent discussions with prospective lenders, reflecting a 40% cut from the initial amount. U.S. News noted that the original proposal raised concerns among investors regarding the challenges in setting a valuation for a private company like OpenAI, the developer of ChatGPT.
Lenders question private OpenAI valuation and structure
Bloomberg’s initial coverage of the deal indicated that SoftBank was pursuing “a $10 billion loan secured by its shares in US artificial intelligence giant OpenAI,” structured as a two-year margin loan with an extension option. Bloomberg highlighted that this facility would enable the Japanese conglomerate to “take on more debt for its AI initiatives” without needing to divest its OpenAI equity.
While the structure is relatively straightforward, it carries notable risks: SoftBank borrows against its OpenAI equity, and if the value of this collateral diminishes, lenders can require additional margin or claim shares. According to the Economic Times, “some creditors voiced concerns over how to value OpenAI, a privately held entity,” which has missed certain internal sales and user targets in recent quarters. A separate evaluation on the Chinese platform Futu emphasized that “the crux of the issue lies in lenders’ inability to determine a fair value” for OpenAI, categorizing the loan discussions as “a significant setback” for SoftBank’s AI leverage strategy.
These concerns arise amidst SoftBank’s already significant AI financing activities. In March, Bloomberg reported that SoftBank had secured a $40 billion bridge loan to support its OpenAI investment and overall corporate needs, with the deal backed by a consortium of global banks that is currently being syndicated. Institutions like HSBC, BNP Paribas, and Intesa Sanpaolo were said to be participating as sub-underwriters, each being asked to contribute around $5 billion. Reuters, summarizing similar findings, added that SoftBank “is pursuing a loan of as much as $40 billion” to bolster its OpenAI investment. Yahoo Finance reiterated this figure, illustrating the extent of leverage tied to the AI venture.
What the scaled-back loan means for SoftBank’s AI push
The margin loan was envisioned as a key component in that framework: by borrowing against OpenAI shares rather than selling them, SoftBank could generate cash to expand its AI endeavors—potentially into infrastructure initiatives such as the “Stargate” data center project—while retaining potential benefits if OpenAI’s valuation continues to ascend. TechFundingNews pointed out that the $10 billion margin loan was “only one part of SoftBank’s larger AI financing strategy,” which reportedly includes commitments exceeding $60 billion to OpenAI and related projects through Vision Fund 2, the $40 billion bridge loan, and other arrangements.
Reducing the margin loan target to approximately $6 billion doesn’t eliminate that strategy but indicates that creditors’ appetite for concentrated private-equity-collateral risks is not infinite, even in a market focused on AI. As Bloomberg referenced in a prior article concerning the $40 billion bridge loan, exposure to OpenAI represents “one of the biggest tests yet of creditor sentiment toward the Japanese conglomerate’s debt-centric push into artificial intelligence.”
The latest reduction implies that, for now, banks and funds are willing to support SoftBank’s AI ambitions—however, only to the extent that they can assure their own risk committees that the collateral backing their loans can be assessed based on more than just speculative insights from the secondary market.