SoftBank Pursues $5 Billion Loan for OpenAI Investment, Using Arm Shares as Collateral Amidst Accelerating AI Growth; Total Investment Could Exceed $30 Billion

SoftBank is securing a $5 billion margin loan to invest in OpenAI, leveraging shares from Arm Holdings as collateral, bringing its total borrowing against Arm to $18.5 billion. This strategy allows SoftBank to enhance its stake in OpenAI and bolster its AI infrastructure investments, following a series of significant financial commitments. The Japanese investment giant has already accessed $13.5 billion in loans from Arm shares by March 2025, maintaining flexibility for further credit expansion. This typical approach for SoftBank reflects its reliance on the growing value of Arm’s stock, which surged 38% this year. Recent AI initiatives include a $500 billion Stargate project with OpenAI and Oracle, alongside substantial acquisitions like ABB’s robotics and Ampere Computing. However, analysts caution that these aggressive funding strategies may edge SoftBank towards its 25% loan-to-value limit, raising credit profile concerns. Balancing growth against financial stability will be crucial moving forward.

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