SoftBank is racing to close a $22.5 billion OpenAI funding gap before 2026

SoftBank Group is racing to close a $22.5 billion funding commitment to OpenAI by year-end through an array of cash-raising schemes, including a sale of some investments, and could tap its undrawn margin loans borrowed against its valuable ownership in chip firm Arm Holdings, sources said. The “all-in” bet on OpenAI is among the biggest yet by SoftBank CEO Masayoshi Son , as the Japanese billionaire seeks to improve his firm’s position in the race for artificial intelligence . To come up with the money, Son has already sold SoftBank’s entire $5.8 billion stake in AI chip leader Nvidia , offloaded $4.8 billion of its T-Mobile US stake, and slashed staff. Son has slowed most other dealmaking at SoftBank’s Vision Fund to a crawl, and any deal above $50 million now requires his explicit approval, two of the sources told Reuters. Son’s firm is working to take public its payments app operator, PayPay. The initial public offering, originally expected this month, was pushed back due to the 43-day-long U.S. government shutdown , which ended in November. PayPay’s market debut, likely to raise more than $20 billion, is now expected in the first quarter of next year, according to one direct source and another person familiar with the efforts. The Japanese conglomerate is also looking to cash out some of its holdings in Didi Global, the operator of China’s dominant ride-hailing platform, which is looking to list its shares in Hong Kong after a regulatory crackdown forced it to delist in the U.S. in 2021, a source with direct knowledge said. Investment managers at SoftBank’s Vision Fund are being directed toward the OpenAI deal, two of the above sources said. SoftBank’s scramble to marshal funds offers a window into the strain faced even by the world’s biggest dealmakers as they scramble to finance ambitious AI data center projects worth hundreds of billions of dollars. SoftBank declined to comment. SOFTBANK HAS OPTIONS OpenAI has not yet received the remaining funding, but expects the money to come in by the end of 2025, as stipulated in the contract, sources said. SoftBank has multiple sources of capital it could tap, including margin loans, cash on its balance sheet, stakes in listed companies, and corporate bonds or bridge loans, sources said. Son has strong reasons to draw on a range of funding mechanisms to fulfill those obligations. SoftBank secured a deal to invest in OpenAI at a $300 billion valuation in April. Since then, the valuation of OpenAI has risen dramatically and the company is in talks to raise additional funding from investors, including Amazon, tripling its valuation to close to $900 billion, one of the sources added, which would give SoftBank a significant paper gain once the transaction is completed. A major pool of capital for SoftBank is its undrawn capacity of margin loans borrowed against its ownership of British semiconductor and software design company Arm Holdings. SoftBank recently expanded its margin loan capacity by $6.5 billion, bringing the total undrawn capacity to $11.5...

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