SoftBank Raises $11.1B to Fund Its Next OpenAI Investment
Synopsis
SoftBank has raised $11.1 billion through dollar and euro bonds as it prepares to fund the final $10 billion tranche of its OpenAI investment.
Key Highlights
- The Japanese conglomerate SoftBank Group has sold $11.1 billion in bonds denominated in dollars and euros.
- Proceeds will be used to fund the last $10 billion tranche of its OpenAI investment.
- Including its latest investment, SoftBank will have invested a total of $64.6 billion in OpenAI by the time it is completed.
- SoftBank boosted its USD and EUR debt sales by issuing 3x and 2x senior notes respectively.
- The firm also launched about 1 trillion yen ($6.32 billion) in corporate bonds targeted at retail investors this month.
SoftBank Issues $11.1 Billion in Bonds
Technology investor SoftBank Group shares $11.1 billion of bonds to pay for ongoing investments in artificial intelligence.
The bonds have been USD- and EUR-denominated ideas, respectively. Simultaneously, the dollar-denominated senior notes of SoftBank Group Corp’s subsidiary in Singapore have been placed on issue with three series maturing varieties at maturity periods of 3 years, 5 years and 13 years (with a variable semi-annual interest rate).
It issues $1 billion of notes due in 2 years at an interest rate of 8.625%. It also sold $4.5 billion in 5-1/ 2 year notes at a 9.25% coupon, and another $4.5 billion in 7-1/ 2 year notes at a 9.75% coupon.
SoftBank Also Issues Euro Bonds
With the dollar bonds, SoftBank also sold €500 million each of two euro-denominated senior notes. As per the filing, the first tranche has a tenure of four years and yields 7.125% while the second has a six-year tenure and yields 8%. The new bond issue gives SoftBank even more cash, as the company is getting ready to make its last payment on the investment in OpenAI it had planned.
$10 Billion OpenAI Investment
SoftBank will use the bonds to finance an additional $10 billion in tranches from a total of $30 billion, which it has committed to invest in ChatGPT owner OpenAI. Including this investment, SoftBank’s total cash invested in OpenAI will be a whopping $64.6 billion.
The fresh capital for SoftBank comes as the Japanese company doubles down on its investments in artificial intelligence. The firm is reportedly selling bonds to fund its upcoming OpenAI investment.
SoftBank Issues More In Retail Bonds
Earlier this month, SoftBank had another significant fundraising deal, the latest bond issue. It published 1 trillion yen ($6.32 billion) of corporate bonds targeting retail investors. The deal is the latest in SoftBank’s historic funding effort.
What This Means for Australian Businesses and Entrepreneurs
A new US$11.1bn bond issue from Japan’s SoftBank makes clear just how much capital is being prepared to back artificial intelligence investments. The final planned investment by SoftBank, which is part of its $10 billion target, will see the Japanese company raise its total investment in OpenAI to a staggering $64.6 billion upon completion. The new funding round captures strategic alignment with SoftBank, indicating it still pours substantial cash into its OpenAI investment and the overall artificial intelligence strategy.
Source: Reuters
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
You Might Also Like
PayPal Splits Into Three Units and Gives Venmo Its Own Division
Nick Woodman’s GoPro Story: How a Surfing Problem Became a Billion-Dollar Business
