SoftBank is increasingly viewed as a proxy for OpenAI, despite OpenAI’s ongoing losses and substantial financial commitments. This situation is critical as SoftBank’s paper profits don’t translate to actual financing, which it requires to support new AI projects. To fund these initiatives, SoftBank has divested from liquid assets, like its Nvidia stake and part of its T-Mobile share, leading to a rise in its loan-to-asset-value ratio from 16.5% to 21.5%. With a below-investment-grade S&P rating, the market anticipates further asset sales or debt accumulation. As the AI sector grows competitive, OpenAI’s previously unmatched growth could become less distinct. While investor interest in OpenAI remains high—with last year’s $40 billion funding oversubscribed—SoftBank’s concentrated investment strategy becomes increasingly precarious. In a tightening AI arms race, the potential for costly mistakes increases as market leaders become more interchangeable.
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