SoftBank's High-Stakes OpenAI Gamble Sparks Financial Turmoil
SoftBank Group CEO Masayoshi Son has placed an "all in" wager on artificial intelligence, dramatically escalating investments in OpenAI. This bold move, however, is now casting a shadow over the Japanese conglomerate's financial stability, triggering significant stock declines and credit rating pressures.
Aggressive Funding and Strategic Divestments
In a decisive push, SoftBank reportedly rushed to finalize a staggering $22.5 billion funding commitment to Sam Altman's OpenAI by the end of last year. To amass this colossal war chest, the company employed a complex array of cash-raising strategies. These included liquidating major stakes and potentially securing billions in margin loans, marking what insiders describe as a defining "all-in" maneuver by CEO Son.
The execution involved aggressive divestments:
- Selling its entire $5.8 billion stake in Nvidia, the world's most valuable company.
- Offloading $4.8 billion of its holding in T-Mobile, America's largest telecom service provider.
By the close of last year, these efforts culminated in SoftBank holding approximately an 11% stake in OpenAI, solidifying its deep commitment to the AI frontier.
Market Backlash and Credit Downgrades
Despite the strategic positioning, Masayoshi Son's big bet on AI and Sam Altman appears to be backfiring. On Monday, March 9, SoftBank shares plummeted as much as 12.5%, hitting their lowest level since August 2025. This sharp decline reflects growing market apprehension over the group's expanding AI commitments.
The pressure intensified following reports that Oracle and OpenAI scrapped plans to expand a flagship AI data center in Texas, part of the broader Stargate initiative. Consequently, SoftBank Group Corp's credit default swaps (CDS) widened to an 11-month high, remaining the widest among Japanese companies as its heavy OpenAI investment weighed on its credit profile.
Over the past few months, SoftBank's shares have nearly halved, with increasing scrutiny over the scale of its involvement with OpenAI. Earlier this month, S&P Global Ratings revised SoftBank's outlook to negative on March 3, directly citing the company's additional investment in OpenAI. The rating agency imposed a negative outlook on its already-junk rating, highlighting that OpenAI is among SoftBank's investments with the weakest credit quality.
S&P further warned that many of SoftBank's AI-related investments face significant innovation risks and intense competition, potentially leading to a deterioration in the creditworthiness of its investment portfolio.
Financial Strains and Broader Industry Impact
Compounding the troubles, SoftBank is reportedly seeking bridge loans to cover its OpenAI investment until it can generate funds from selling other holdings. The company holds liquid assets, including $80 billion worth of chip designer Arm, and sold its Nvidia stake last year to fund an earlier OpenAI commitment. Additionally, earlier this year, SoftBank advanced a $1 billion float in New York for PayPay, its Japanese digital payments platform, to bolster finances.
SoftBank is not alone in facing challenges from big bets on OpenAI. Two other tech giants, Oracle and CoreWeave, have also seen substantial dents in their market value, with both companies down more than two-fifths. In September 2025, Oracle revealed that its remaining performance obligations (RPO) surged by triple digits to a $455 billion backlog, driven by cloud demand from OpenAI. This news initially propelled Oracle stock up over 30% in a single day, but shares have since tumbled.
The September rally was halted by concerns over:
- The escalating costs for Oracle to build cloud data centers.
- The extent to which Oracle's cloud backlog relies on OpenAI.
This broader industry trend underscores the high risks associated with massive AI investments, as companies navigate innovation pressures and competitive landscapes.
