SoftBank Issues $11.1 Billion in Bonds to Fund OpenAI Investment

SoftBank Group shares climbed more than 7% on Thursday, as the Japanese technology investor announced an $11.1 billion bond issuance. The move aims to help fund the company's significant investment in artificial intelligence firm OpenAI.

The bond sale comprises $10 billion in dollar-denominated senior notes and 1 billion euros (approximately $1.14 billion) in euro-denominated notes. SoftBank stated the proceeds will be used to cover a $10 billion payment for the third and final tranche of its $30 billion follow-on investment in OpenAI, which is expected to close on October 1. Funds will also support general corporate purposes.

This bond issuance highlights CEO Masayoshi Son's aggressive push into AI. SoftBank agreed to the $30 billion investment in OpenAI in February, which will bring its cumulative investment in the ChatGPT creator to $64.6 billion and result in an approximate 13% stake upon completion.

The fundraising comes amid increased investor scrutiny of SoftBank's strategy to finance its extensive AI ambitions and the potential impact of rising leverage on its balance sheet.