Key Points
- SoftBank needs to finalize a $22.5 billion investment in OpenAI by year-end.
- Masayoshi Son sold Nvidia and T-Mobile shares to help raise the cash.
- OpenAI’s valuation has jumped from $300 billion to nearly $900 billion.
- SoftBank is borrowing against its stake in the chipmaker Arm. OpenAI is using the funds to compete with Google’s Gemini AI.
Masayoshi Son, the billionaire head of SoftBank, is moving fast to gather $22.5 billion for OpenAI before the year ends. This huge investment is one of his biggest gambles yet. To raise cash, Son has already sold major stock holdings. He dumped SoftBank’s entire $5.8 billion stake in Nvidia and sold $4.8 billion worth of T-Mobile shares. He even cut staff and slowed down almost all other deals at the company’s Vision Fund. Now, Son personally reviews and approves any investment larger than $50 million.
SoftBank is pulling every lever possible to secure this funding. They are looking at selling shares in Didi, the Chinese ride-hailing giant. They are also borrowing billions of dollars against their ownership of Arm, the chip design firm.
Since ARM’s stock price has tripled recently, SoftBank can use those shares as collateral to borrow even more. Son also hoped to take the payment app PayPay public this month, but the recent U.S. government shutdown has pushed the IPO to early next year.
There is a big reason for this rush. SoftBank agreed to invest in OpenAI when the startup was valued at $300 billion. Now, reports suggest OpenAI’s value has soared to nearly $900 billion. This means SoftBank is already projecting a substantial profit on paper.
However, the deal had a condition: OpenAI had to transition from a nonprofit to a for-profit company. Since they hit that milestone in October, SoftBank must now deliver the remaining billions.
OpenAI needs the money just as much as SoftBank wants to invest it. The company is reportedly in a “code red” phase as it tries to stay ahead of Google’s Gemini AI. Training these massive AI models and building data centers is costly. CEO Sam Altman has ambitious plans, such as the “Stargate” project, which aims to build $500 billion in data centers.
While some experts worry about an AI bubble, Son is going all-in, betting that leading the AI race is worth the risk.
