SoftBank Group Corp. faces a critical challenge to raise $22.5 billion by year-end to fulfill its commitment to OpenAI Group PBC for the ambitious $500 billion Stargate initiative. This initiative aims to establish numerous AI data centers across the U.S. and allied nations, ensuring U.S. leadership in developing “artificial general intelligence.” CEO Masayoshi Son has various strategies at his disposal, including leveraging untapped margin loans linked to investments in Arm Holdings Plc and T-Mobile USA Inc. However, Son has become more cautious, requiring personal approval for ventures exceeding $50 million. Meanwhile, Oracle Corp. continues its data center expansion to support OpenAI, despite facing heavy borrowing. The urgency for funding is emphasized by OpenAI CEO Sam Altman’s “code red” status, focusing on improving ChatGPT amid stiff competition from Google LL. This funding is vital for OpenAI’s future as it seeks to maintain its competitive edge.
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