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SoftBank Races to Raise $22.5 Billion for OpenAI by Year-End, May Use Arm Stake to Secure Financing

MarketDash Editorial Team
5 hours ago
SoftBank is scrambling to pull together $22.5 billion in funding for OpenAI before the clock runs out on 2025, selling off major assets, freezing new deals, and potentially leveraging its Arm Holdings stake as AI spending pressure intensifies.

When Masayoshi Son makes a bet, he doesn't really do things halfway. SoftBank Group (SFTBY) is apparently in full scramble mode, trying to pull together $22.5 billion in funding for OpenAI before the calendar flips to 2026. And the playbook here involves selling pretty much everything that isn't nailed down, freezing most new investments, and possibly leveraging one of its crown jewels to make it all work.

Selling Everything to Fund the AI Bet

SoftBank has already offloaded its entire $5.8 billion stake in Nvidia Corp (NVDA). Yes, you read that right. The company that spent years positioning itself as the ultimate AI investor just sold out of arguably the most obvious AI infrastructure play on the planet. It also dumped about $4.8 billion worth of T-Mobile U.S. (TMUS) shares. All of this cash is being redirected toward one target: OpenAI.

The fire sale doesn't stop there. According to a Reuters report published Friday, SoftBank is also looking at monetizing chunks of its Didi Global stake and preparing for a PayPay initial public offering that could potentially raise more than $20 billion next year. Son has essentially put the company's Vision Fund on ice, requiring his personal approval for any investment exceeding $50 million. That's a pretty clear signal that everything else takes a backseat to the AI race.

SoftBank did not immediately respond to a request for comment.

Arm Holdings Becomes the Collateral

Here's where it gets interesting. SoftBank may also tap margin loans backed by its ownership in Arm Holdings (ARM), according to the report. The firm has boosted its margin loan capacity by $6.5 billion, bringing its total unused borrowing headroom to $11.5 billion.

This move is made possible by the fact that Arm's shares have surged to nearly three times their IPO price, giving SoftBank significantly more collateral flexibility. In other words, Arm's success in the public markets is now being leveraged to fund SoftBank's other big AI bet. It's a high-stakes financial maneuver that shows just how committed Son is to this strategy.

Why OpenAI Needs the Cash Now

The funding commitment stems from SoftBank's April agreement to invest up to $30 billion in OpenAI, contingent on the company transitioning to a for-profit structure. That transition was completed in October, which means the clock is ticking on SoftBank's commitments.

OpenAI is burning through capital at an eye-watering pace. Training and operating advanced AI models isn't cheap, and the competition from Alphabet Inc.'s (GOOGL) Google has only intensified. Both SoftBank and OpenAI are also investors in Stargate, a massive AI data center initiative that's viewed as critical to maintaining U.S. leadership in artificial intelligence. That project alone represents billions in additional capital requirements.

OpenAI Eyes Massive Valuation Jump

Meanwhile, OpenAI has reportedly held early-stage discussions with investors about raising up to $100 billion at an estimated valuation of around $750 billion. If that round actually happens, it would represent a significant jump from the company's reported $500 billion valuation in October, when current and former OpenAI employees sold about $6.6 billion worth of shares to investors.

The Microsoft Corp (MSFT)-backed startup is also preparing for what could become one of the largest initial public offerings on record. Previous reports suggested the company could submit filings to U.S. regulators as early as the second half of 2026, with a possible valuation approaching $1 trillion.

That's a staggering figure, but it reflects the scale of the opportunity and the competition. Google, Microsoft, and other tech giants are all pouring resources into AI, and OpenAI needs capital to stay ahead. The company's ChatGPT product may have captured the public imagination, but maintaining that lead requires constant innovation and massive infrastructure investments.

The Bigger Picture

What we're watching here is essentially a financial arms race. SoftBank is liquidating positions, freezing other investments, and potentially leveraging one of its most valuable assets to fund OpenAI. It's a strategy that could pay off spectacularly if OpenAI becomes the defining AI company of this era. But it's also concentrated risk on a massive scale.

The fact that SoftBank sold its entire Nvidia position to fund this bet is particularly noteworthy. Nvidia has been the most obvious beneficiary of the AI boom, and SoftBank is trading that sure thing for a higher-risk, potentially higher-reward play in OpenAI. That tells you everything you need to know about Son's conviction level.

For now, the race is on to assemble the $22.5 billion before year-end. Asset sales, margin loans, and frozen dealmaking are all part of the plan. And if OpenAI's valuation continues climbing toward that $750 billion mark, SoftBank's all-in strategy might look like genius in retrospect. Or it might serve as a cautionary tale about concentration risk. We'll find out soon enough.

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SoftBank Races to Raise $22.5 Billion for OpenAI by Year-End, May Use Arm Stake to Secure Financing

MarketDash Editorial Team
5 hours ago
SoftBank is scrambling to pull together $22.5 billion in funding for OpenAI before the clock runs out on 2025, selling off major assets, freezing new deals, and potentially leveraging its Arm Holdings stake as AI spending pressure intensifies.

When Masayoshi Son makes a bet, he doesn't really do things halfway. SoftBank Group (SFTBY) is apparently in full scramble mode, trying to pull together $22.5 billion in funding for OpenAI before the calendar flips to 2026. And the playbook here involves selling pretty much everything that isn't nailed down, freezing most new investments, and possibly leveraging one of its crown jewels to make it all work.

Selling Everything to Fund the AI Bet

SoftBank has already offloaded its entire $5.8 billion stake in Nvidia Corp (NVDA). Yes, you read that right. The company that spent years positioning itself as the ultimate AI investor just sold out of arguably the most obvious AI infrastructure play on the planet. It also dumped about $4.8 billion worth of T-Mobile U.S. (TMUS) shares. All of this cash is being redirected toward one target: OpenAI.

The fire sale doesn't stop there. According to a Reuters report published Friday, SoftBank is also looking at monetizing chunks of its Didi Global stake and preparing for a PayPay initial public offering that could potentially raise more than $20 billion next year. Son has essentially put the company's Vision Fund on ice, requiring his personal approval for any investment exceeding $50 million. That's a pretty clear signal that everything else takes a backseat to the AI race.

SoftBank did not immediately respond to a request for comment.

Arm Holdings Becomes the Collateral

Here's where it gets interesting. SoftBank may also tap margin loans backed by its ownership in Arm Holdings (ARM), according to the report. The firm has boosted its margin loan capacity by $6.5 billion, bringing its total unused borrowing headroom to $11.5 billion.

This move is made possible by the fact that Arm's shares have surged to nearly three times their IPO price, giving SoftBank significantly more collateral flexibility. In other words, Arm's success in the public markets is now being leveraged to fund SoftBank's other big AI bet. It's a high-stakes financial maneuver that shows just how committed Son is to this strategy.

Why OpenAI Needs the Cash Now

The funding commitment stems from SoftBank's April agreement to invest up to $30 billion in OpenAI, contingent on the company transitioning to a for-profit structure. That transition was completed in October, which means the clock is ticking on SoftBank's commitments.

OpenAI is burning through capital at an eye-watering pace. Training and operating advanced AI models isn't cheap, and the competition from Alphabet Inc.'s (GOOGL) Google has only intensified. Both SoftBank and OpenAI are also investors in Stargate, a massive AI data center initiative that's viewed as critical to maintaining U.S. leadership in artificial intelligence. That project alone represents billions in additional capital requirements.

OpenAI Eyes Massive Valuation Jump

Meanwhile, OpenAI has reportedly held early-stage discussions with investors about raising up to $100 billion at an estimated valuation of around $750 billion. If that round actually happens, it would represent a significant jump from the company's reported $500 billion valuation in October, when current and former OpenAI employees sold about $6.6 billion worth of shares to investors.

The Microsoft Corp (MSFT)-backed startup is also preparing for what could become one of the largest initial public offerings on record. Previous reports suggested the company could submit filings to U.S. regulators as early as the second half of 2026, with a possible valuation approaching $1 trillion.

That's a staggering figure, but it reflects the scale of the opportunity and the competition. Google, Microsoft, and other tech giants are all pouring resources into AI, and OpenAI needs capital to stay ahead. The company's ChatGPT product may have captured the public imagination, but maintaining that lead requires constant innovation and massive infrastructure investments.

The Bigger Picture

What we're watching here is essentially a financial arms race. SoftBank is liquidating positions, freezing other investments, and potentially leveraging one of its most valuable assets to fund OpenAI. It's a strategy that could pay off spectacularly if OpenAI becomes the defining AI company of this era. But it's also concentrated risk on a massive scale.

The fact that SoftBank sold its entire Nvidia position to fund this bet is particularly noteworthy. Nvidia has been the most obvious beneficiary of the AI boom, and SoftBank is trading that sure thing for a higher-risk, potentially higher-reward play in OpenAI. That tells you everything you need to know about Son's conviction level.

For now, the race is on to assemble the $22.5 billion before year-end. Asset sales, margin loans, and frozen dealmaking are all part of the plan. And if OpenAI's valuation continues climbing toward that $750 billion mark, SoftBank's all-in strategy might look like genius in retrospect. Or it might serve as a cautionary tale about concentration risk. We'll find out soon enough.

    SoftBank Races to Raise $22.5 Billion for OpenAI by Year-End, May Use Arm Stake to Secure Financing - MarketDash News