SoftBank pledges OpenAI shares in exchange for a $10 billion loan, Masayoshi Son bets on AI with additional leverage

Bloomberg reports that SoftBank is seeking a $10 billion margin loan using its holdings in OpenAI as collateral. Despite credit ratings being downgraded and borrowing costs reaching historic highs, Masayoshi Son continues to increase his high-stakes AI gamble.
(Background: The Largest Single-Round Funding in History: OpenAI Completes $122B Raise, Valuation Surges Past $852 Billion)
(Additional context: SoftBank’s $30 Billion OpenAI Bet Spurs S&P Credit Outlook Cut)

Table of Contents

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• The Numbers Behind the Debt Stacking
• Credit Ratings Turn Red, Loans Keep Coming
• Masayoshi Son’s Algorithm: Using Debt to Buy the Future

$10 billion — this is the size of SoftBank’s latest financing, using its OpenAI shares as collateral to borrow from banks. Bloomberg, citing sources familiar with the matter, reports that this two-year margin loan, with a one-year extension option, has an initial interest rate of approximately 7.88%, though details are not yet finalized.

This is not the first time Masayoshi Son has taken the route of margin loans. As of November last year, SoftBank’s margin loan secured by its Arm Holdings shares had grown to $20 billion. Now, OpenAI’s shares have also been added to this collateral list.

The Numbers Behind the Debt Stacking

SoftBank’s debt-raising pace over the past year demonstrates Son’s determination and scale in betting on AI.

Bloomberg notes that at the end of March this year, SoftBank completed a $40 billion loan, its largest dollar-denominated credit facility ever. One purpose was to fund additional investments in OpenAI. Recently, SoftBank committed to investing another $30 billion in OpenAI, bringing total investments to over $60 billion, including previous contributions.

Last month, SoftBank issued a multi-tranche bond raising $3.6 billion, part of which was used to repay transitional loans related to its OpenAI investments. The 10-year dollar tranche of this issuance carried an interest rate of 8.5%, a record high for the company’s bond offerings.

From $40 billion to $3.6 billion and now to $10 billion, the ongoing leverage structure comes with the cost of rising financing expenses.

Credit Ratings Turn Red, Loans Keep Coming

The capital markets are not without concerns about this logic. S&P downgraded SoftBank’s credit outlook from “Stable” to “Negative” in March, citing the large investments in OpenAI potentially impairing the group’s liquidity and asset quality. Meanwhile, SoftBank’s CFO, Yoshimitsu Goto, admitted that the group’s loan-to-asset ratio (LTV) might “temporarily” exceed the internally set limit of 25%.

Nevertheless, Bloomberg reports that market signals still show lenders are willing to continue financing SoftBank’s investments in OpenAI as long as conditions are favorable. The phrase “as long as conditions are good” is central: a borrowing cost of 7.88%, hitting a record high in coupon rate, reflects the market’s premium pricing for this high-stakes bet.

In addition to its OpenAI holdings, Bloomberg notes that SoftBank also owns shares in T-Mobile US, Intel, and ByteDance, which could be sold in the future to provide liquidity if needed.

Masayoshi Son’s Algorithm: Using Debt to Buy the Future

From a timeline perspective, this operation has an internal logic. SoftBank’s pledge of OpenAI shares for a loan depends on these shares having sufficient market value. OpenAI just completed the largest single-round funding in history, raising $122B with a valuation of $852 billion; using these shares as collateral makes financial sense.

Son’s calculation is: before OpenAI goes public and liquidity is limited, leverage the paper wealth into cash through share pledges, then reinvest in the next phase of AI expansion. The logical chain is quite clear: keep spending, keep betting, keep borrowing.