SoftBank Completes Its $64.6 Billion OpenAI Gamble — But Can the Returns Outrun the Interest Payments?
Shares of SoftBank Group tumbled 5.8% to ¥6,310 as investors digested the sheer scale of its completed OpenAI commitment and the eye-watering cost of the debt used to finance it. The company executed the third and final $10 billion tranche on October 1, completing a $30 billion follow-on program and bringing its cumulative OpenAI investment to $64.6 billion for roughly 13% ownership. The reaction was swift: the stock reversed sharply on Friday, wiping out the previous session's 4.2% gain as investors shifted from celebrating the expanding stake to questioning its cost and concentration.
SoftBank Sold the Biggest Junk Bond Deal in History to Pay for This
SoftBank raised $11.1 billion in dollar- and euro-denominated bonds in what became the largest high-yield corporate bond sale on record.
The bonds carry interest rates of 8.625%, 9.25%, and 9.75% — meaning SoftBank is paying nearly ten cents on every dollar it borrowed, every year, before OpenAI generates a dime of return for its backers. By comparison, a 2021 SoftBank bond issuance yielded between 2.125% and 5.25%. The cost of conviction has roughly doubled.
Nearly All of SoftBank's Value Now Rides on Two Assets
The stock is shifting from diversified holding company to a leveraged proxy for Arm and OpenAI, which now account for about three-quarters of SoftBank's asset value. That concentration means any stumble in AI sentiment — regulatory slowdowns, competitive threats from Anthropic, or delayed commercialization — hits SoftBank harder than almost any other listed stock. When OpenAI's CEO said in September the company wouldn't pursue an IPO in 2026, SoftBank shares plunged 11% in a single session — a preview of how tightly this stock tracks OpenAI headlines.
The Clock Is Ticking on Proving the Bet Was Worth It
SoftBank's return depends not only on OpenAI becoming more valuable, but on how quickly that value can be realized — and financing costs are being paid today.
OpenAI itself projects cumulative negative free cash flow of $278 billion from 2026 through 2030 , meaning the AI firm is years away from self-sufficiency. S&P lowered its credit outlook on SoftBank to negative earlier this year, citing concerns that aggressive AI investments could strain liquidity.
The Analyst Split Tells the Story
Bernstein holds a Buy target at ¥11,200, while Deutsche Bank downgraded to Hold at ¥8,700. The gap reflects a fundamental debate: is SoftBank a visionary first-mover or a leveraged bet borrowing at nearly 10% to own a piece of a company that won't turn cash-flow positive for years? The answer depends entirely on whether AI's promise arrives before the interest bill becomes unbearable.