SoftBank’s Credit Outlook Deteriorates Following $30 Billion Investment in OpenAI

S&P Global has downgraded SoftBank’s outlook to ‘negative’ due to its substantial investments in OpenAI, which it classified as having the ‘weakest’ credit quality among SoftBank’s holdings. So far, SoftBank has invested $30 billion in OpenAI and plans to commit an additional $30 billion this year, bringing OpenAI to 30% of its assets. With these investments, SoftBank’s total portfolio may surpass $320 billion, yet it remains susceptible to significant AI innovation risks associated with its investments in startups like SambaNova and ABB Robotics. S&P warns this strategy could weaken SoftBank’s negotiating power and harm its loan-to-value (LTV) ratio. SoftBank previously divested its Nvidia shares worth over $5 billion but remains committed to OpenAI and Arm as pivotal growth drivers. An OpenAI IPO is seen as crucial for SoftBank’s recovery, but selling assets might be necessary for liquidity, a process that S&P views as uncertain.

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