OpenAI CEO Sam Altman announced that the company will not go public this year, placing significant financial pressure on SoftBank. SoftBank has invested approximately $64.6 billion in OpenAI, holding a 13% stake, and had planned to exit through an OpenAI IPO. Bloomberg estimates SoftBank faces a funding gap of at least $20 billion, requiring it to issue $10–$20 billion in bonds to cover the shortfall. Arm and OpenAI together account for about 75% of SoftBank’s balance sheet, reflecting extreme concentration. Additionally, an expected interest rate hike by the Bank of Japan could undermine SoftBank’s reliance on yen carry trades, increasing its financing costs. Investors are pressuring Masayoshi Son by pushing up bond yields.Article author and source: Wall Street Journal
OpenAI has put off its plans for an IPO this year, casting SoftBank, its largest external shareholder, into the spotlight of the credit markets—Altman can afford to wait, but Son cannot.
Wall Street Journal noted that on September 13, Sam Altman explicitly stated in an interview with Fortune that, despite OpenAI having secretly filed for an IPO in June, it will not go public this year and will instead prioritize addressing concerns related to AI safety.
This statement has worsened SoftBank's liquidity challenges. SoftBank executives are currently meeting with investors in New York to explore issuing bonds worth $10 billion to $20 billion.
On Monday, SoftBank's stock plunged nearly 11% in Tokyo, with credit default swaps (CDS) rising to their highest level since March.
Bloomberg estimates that SoftBank faces a funding gap of at least $20 billion, and the proceeds from bond issuance are precisely needed to repay the $40 billion bridge loan previously taken out to fund additional investments in OpenAI. Filling this gap becomes Masayoshi Son’s next greatest challenge.
Expected listing failed to materialize, and funding pressures continue to rise.
OpenAI's IPO was the most critical exit point in SoftBank's investment thesis.
The market previously anticipated that OpenAI could complete its IPO as early as September, with a valuation exceeding $1 trillion. SoftBank has invested approximately $64.6 billion in total, holding around 13% of the company. The latest funding round values OpenAI at $852 billion.
Altman's statement dashed this expectation, leaving SoftBank unable to liquidate its position in the short term—a clear risk signal for credit investors.
According to Bloomberg Intelligence, even after SoftBank raised $10 billion through margin loans tied to its OpenAI shares and $6.3 billion through retail yen bonds, its funding gap remains at least $20 billion.
If Masayoshi Son further increases investment in U.S. data centers, the actual funding requirement will be even higher.
The structure of SoftBank’s balance sheet also concerns credit investors. Its venture portfolio is highly concentrated, with just two assets—Arm Holdings and OpenAI—accounting for approximately 75% of the total asset value.
More critically, Son Masayoshi borrowed money to purchase shares in OpenAI, and now SoftBank’s recurring cash flow—such as dividends from its Japanese telecom subsidiary—is far insufficient to cover the interest payments.
The era of yen carry trades has ended; the advantage of cheap financing has disappeared.
The yen carry trade that supported Masayoshi Son’s investment strategy for decades is no longer working.
SoftBank has approximately half of its interest-bearing debt denominated in Japanese yen, while nearly all of its equity assets are denominated in U.S. dollars.
As Japan's 10-year government bond yield rises to around 3%, the Bank of Japan is again expected to raise interest rates this week, making the cheap domestic funding that Masayoshi Son relied upon no longer readily available.
SoftBank’s shift to conducting roadshows in the U.S. for institutional investors is a direct reflection of this practical change.
Market traders have sensed an opportunity, betting that SoftBank will need to offer generous terms to alleviate liquidity pressures. Existing SoftBank dollar bonds are trading at prices closer to lower-rated B-grade corporate bonds, far below the BB+ rating assigned by Fitch.
The yield on the five-year notes issued in April this year has surpassed 8.5%, comparable to bonds issued by junk-rated data center developers such as Core Scientific.
All-in or strategic gamble? The market questions concentrated risk.
Son Masayoshi's heavy bet on OpenAI has sparked market skepticism. His initial investment of $34.6 billion, made when OpenAI was valued at approximately $260 billion, has already yielded substantial returns.
However, he added another $30 billion this year after a significant increase in valuation, further straining the company’s balance sheet.
This strategy stands in stark contrast to industry giants like NVIDIA, which have opted for a diversified approach by investing in multiple competing large language model developers, whereas Son Masayoshi has concentrated his bets on a single target.
Supporters may see this as the ultimate expression of Masayoshi Son’s一贯 "all-in" investment philosophy, the very style that propelled him to become Japan’s richest person.
However, credit market investors clearly do not share the same risk appetite. They are more concerned about asset concentration risk and funding gaps, and are forcing Masayoshi Son to pay for his beliefs by demanding higher premiums.