Of all the possible weak links in the daisy-chain, and there are a few, SoftBank's increasingly central role is the most concerning.
Mr. Son's history, going back to the time he briefly held the title of world's richest person, is leveraged beta. No great technological insight (largest investor in WeWork) no fancy risk mitigation, just leverage in all its forms and like Sam Insull, at every level of the organization.
Throw in the fact that OpenAI and their ChatGPT may not be the ultimate winner of this unprecedented build-out and there are reasons to be hyper-aware. Stay tuned.
That said, this loan should be okay (barring a depression where it can't be re-financed, à la Insull) it's all the other borrowings and what Mr. Son will do in the next couple years, that could cause worldwide problems.
From Computing.net, March 27:
Key Points
- SoftBank arranged a $40 billion unsecured bridge facility for additional OpenAI investment
- Facility reaches maturity in March 2027
- Financing consortium includes JPMorgan Chase, Goldman Sachs, Mizuho, SMBC, and MUFG Bank
- SoftBank previously pledged $30 billion to OpenAI through Vision Fund 2
- Proceeds will support both OpenAI investment and broader corporate operations
SoftBank Group revealed on Friday that it has arranged a $40 billion financing package through a bridge loan facility. The capital will support expanded investment in OpenAI, the creator of ChatGPT, alongside general corporate operational needs.
The bridge facility carries no collateral requirements, indicating lenders approved the arrangement based on SoftBank’s financial standing alone. The repayment deadline falls in March 2027.
A consortium of prominent financial institutions provided the financing. The lending group comprises JPMorgan Chase, Goldman Sachs, Mizuho Bank, Sumitomo Mitsui Banking Corp, and MUFG Bank.
SoftBank previously established a significant position in OpenAI. The Tokyo-based investment firm had committed $30 billion to OpenAI via its Vision Fund 2 vehicle.
The newly arranged $40 billion facility supplements that earlier commitment. Together, SoftBank’s aggregate capital allocation to OpenAI represents a substantial financial stake contingent on deployment strategies.
SoftBank shares climbed 3.24% on the Tokyo Stock Exchange after the disclosure. The company trades under ticker symbol 9984 on the Japanese exchange.
SoftBank’s Expanding AI Investment Strategy....
....MUCH MORE
