SoftBank Group is sprinting to gather $22.5 billion by year’s end to honor its commitment to OpenAI. CEO Masayoshi Son appears determined to turn pockets inside out for this massive AI wager.
The effort highlights the eye-watering costs of staying in the artificial intelligence race. Even seasoned dealmakers find themselves juggling assets like a street performer with too many plates.
Sources reveal Son has already cashed out SoftBank’s entire $5.8 billion Nvidia stake – the very chips powering much of today’s AI boom.
He followed that by trimming $4.8 billion from the company’s T-Mobile holdings. Staff cuts have quietly accompanied these moves, tightening belts across the empire.
At the Vision Fund, dealmaking has slowed to a leisurely stroll. Any investment over $50 million now needs Son’s personal nod, ensuring every yen heads toward OpenAI.
Plans for PayPay’s public debut, once eyed for this month, slipped to early next year. A lengthy U.S. government shutdown played spoiler, delaying what could raise over $20 billion.
SoftBank is also eyeing an exit from part of its Didi Global stake. The Chinese ride-hailing giant prepares for a Hong Kong listing after its U.S. delisting drama.
These maneuvers come as OpenAI’s valuation has soared since SoftBank locked in at $300 billion in April. Talks now point to nearly $900 billion, promising handsome paper gains if the funds arrive.
A key lifeline sits in undrawn margin loans against SoftBank’s prized Arm Holdings stake. Arm’s shares have tripled since IPO, swelling borrowing room to $11.5 billion.
The company holds $27 billion in cash at the parent level. A remaining 4% T-Mobile stake adds another $11 billion in potential liquidity.
OpenAI awaits the cash to fuel soaring model training costs. CEO Sam Altman recently declared a “code red” push to sharpen ChatGPT against Google’s Gemini advances.
Both firms back the $500 billion Stargate data center project. Vast computing power is deemed vital for U.S. edge over China in AI.
Altman envisions adding a gigawatt of compute weekly – each costing over $40 billion today. Such scale explains why partners spread the enormous risks.
This scramble underscores broader industry strains. Tech giants commit unprecedented sums to data centers needing chips, power, and cooling.
Concerns linger about returns matching these outlays. Whispers of an AI bubble grow louder amid the spending spree.
SoftBank declined comment. Sources say OpenAI confidently expects the funds by December 31, per contract terms.
Son’s bold play keeps him center stage in AI’s high-stakes game. Whether it pays off handsomely or teaches caution remains the question captivating markets.
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