SoftBank Group (OTC:SFTFB) (OTC:SFTBY) is reportedly racing to assemble $22.5 billion in funding for OpenAI by year-end, leaning on asset sales, potential borrowing, and a sweeping pullback in other investments as the cost of competing in artificial intelligence soars.
SoftBank Sells Assets, Freezes Deals To Fund OpenAI Bet
SoftBank has already sold its entire $5.8 billion stake in Nvidia Corp (NASDAQ:NVDA) and offloaded about $4.8 billion worth of T-Mobile U.S. (NASDAQ:TMUS) shares as CEO Masayoshi Son prioritizes funding OpenAI.
The Japanese conglomerate has sharply slowed dealmaking at its Vision Fund, with any investment exceeding $50 million now requiring Son’s direct approval, signaling an “all-in” focus on AI, according to a Reuters report published Friday.
The company is also exploring monetization of other assets, including portions of its Didi Global stake, and continues preparations for a PayPay initial public offering that could raise more than $20 billion next year, the report said.
Softbank did not immediately respond to Benzinga‘s request for comment.
Arm Holdings Emerges As Key Source Of Capital
SoftBank may also tap margin loans backed by its ownership in Arm Holdings (NASDAQ:ARM), according to Reuters.
The firm has boosted its margin loan capacity by $6.5 billion, lifting its total unused borrowing headroom to $11.5 billion.
Arm’s shares have surged to nearly three times their IPO price, giving SoftBank greater collateral flexibility to support additional borrowing.
Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox.
Why OpenAI Needs The Money Now
The funding commitment stems from SoftBank’s April agreement to invest up to $30 billion in OpenAI, contingent on the company transitioning to a for-profit structure — a move completed in October.
OpenAI is facing surging costs to train and operate AI models while competition from Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google intensifies.
Softbank and OpenAI are also investors in Stargate, a massive AI data center initiative seen as critical to maintaining U.S. leadership in AI.
OpenAI Explores $100 Billion Funding Round, Eyes $750 Billion Valuation
OpenAI has also reportedly held early-stage discussions with investors about raising up to $100 billion at an estimated valuation of around $750 billion.
If finalized, the round would represent a significant jump from the company’s reported $500 billion valuation in October, when current and former OpenAI employees sold about $6.6 billion worth of shares to investors.
The Microsoft Corp (NASDAQ:MSFT)-backed startup is also said to be preparing for what could become one of the largest initial public offerings on record.
Previously, it was reported that the company could submit filings to U.S. regulators as early as the second half of 2026, with a possible valuation approaching $1 trillion.
Benzinga Edge Stock Rankings show that Microsoft maintains a favorable long-term outlook, even as its short and medium-term performance trends remain negative, with more detailed metrics available on the platform.
Check out more of Benzinga’s Consumer Tech coverage by following this link.
Read Next:
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Image via Shutterstock
Recent Comments