SoftBank Plans to Raise 40 Billion to Invest in OpenAI While Nvidia Terminates Investment: Who Is the “Wise One”?

TradingKey - According to media reports, SoftBank Group is in talks for a loan of up to $40 billion to fund its investment in OpenAI, which would mark the largest pure-dollar financing in SoftBank's history.

Sources familiar with the matter stated that the bridge loan has a term of approximately 12 months and is led by JPMorgan (JPM) and three other banks as lead underwriters. Negotiations are currently ongoing, and specific terms may be adjusted. Both JPMorgan and SoftBank declined to comment.

Despite both being involved in the investment in OpenAI, contrary to SoftBank, NVIDIA (NVDA) CEO Jensen Huang stated this Wednesday that NVIDIA's recent $30 billion investment in OpenAI may be its last. This implies that the company has abandoned the $100 billion financing commitment it made to OpenAI last September.

As OpenAI approaches its IPO, SoftBank is going "all in" to invest, while NVIDIA has decided to stop "showering money." At this juncture, who is the more pragmatic player?

SoftBank Bets Big on OpenAI IPO: Injecting $40 Billion, Borrowing Another $40 Billion

Recently, OpenAI announced that it secured $110 billion in new financing, with $30 billion coming from SoftBank, at a pre-money valuation of $730 billion. This also represents the largest single financing round in the AI sector to date.

Bloomberg reports indicate that SoftBank's investment in OpenAI extends beyond the planned $30 billion. As early as March 2025, SoftBank committed to investing up to $40 billion in OpenAI within 12-24 months and planned to complete a capital injection of up to $40 billion by the end of 2025, thereby acquiring an 11% stake in OpenAI and becoming, after Microsoft (MSFT) the second-largest external shareholder.

Analysis suggests that the massive investment in OpenAI has made OpenAI shares a core asset for SoftBank, reflecting founder Masayoshi Son's strong determination to build SoftBank into an "AI empire," with SoftBank's stock price volatility now tightly bound to the performance of ChatGPT.

To fund its investment in OpenAI, SoftBank previously sold its $5.8 billion stake in NVIDIA. Masayoshi Son stated that SoftBank would not have taken this action if it weren't for raising funds to support investments in OpenAI and data center projects. Earlier media reports also noted that SoftBank had already used its Arm (ARM) shares as collateral for loans, borrowing a total of $5 billion. Including previous credit lines, SoftBank has borrowed $18.5 billion using Arm stock as collateral.

However, SoftBank's borrowing is not without consequences. Just this week, S&P lowered SoftBank's credit outlook, citing that the investment in OpenAI could impair its liquidity and asset credit quality, reflecting market concerns over SoftBank's financial health. Financial data for the third quarter of fiscal 2025, as of December 31, 2025, showed SoftBank's current ratio was approximately 0.77, meaning its current assets are insufficient to cover current liabilities due within one year. This has further heightened market worries about SoftBank's financial stability.

SoftBank's Business Philosophy: All or Nothing, Success or Failure

In contrast, NVIDIA's investment appears more restrained. In its quarterly report last November, NVIDIA first warned that the previously announced $100 billion deal faced the risk of falling through. In its February quarterly report this year, NVIDIA warned again, stating there is no guarantee that the company will reach an investment and cooperation agreement with OpenAI or complete the related transaction.

Although NVIDIA's current $30 billion investment in OpenAI still sets a record for the company's funding of a single startup, NVIDIA indicated that not only might this be its last investment in OpenAI, but its $10 billion investment in OpenAI's rival, Anthropic, could also be its last.

It is difficult to judge which investment style is wiser until OpenAI's IPO is settled. However, judging by market reaction, SoftBank has fallen nearly 15% this year despite a strong rally in Japanese stocks, which may prove market unease over its highly leveraged bet on the OpenAI IPO: if OpenAI's listing ultimately receives a lukewarm response, SoftBank's multi-billion dollar debt-funded investment in OpenAI could vanish into thin air.

Unlike SoftBank's investment objectives, NVIDIA, as an underlying provider of AI infrastructure, profits as long as it secures orders and gains larger market share by investing in newcomers like OpenAI and Anthropic. SoftBank, as an investment group, aims to build Masayoshi Son's AI empire from the ground up through controlling stakes in Arm and OpenAI, rather than being submerged before the arrival of the next era.

If OpenAI's valuation continues to soar and it successfully goes public, the investment myth of SoftBank and Masayoshi Son will be validated once again, and its stock price will return to its peak. However, before the dawn of OpenAI's IPO, the market is under no obligation to stand by SoftBank and bear the same risks.