SoftBank is under pressure from several sides: The stalled Stargate expansion, a deteriorated credit rating from S&P Global and a record high loan requirement are shaking confidence in the Japanese company’s AI strategy. Can Masayoshi Son’s vision bear the burden on the financing side?
The stock lost 12.5 percent at its peak, falling to its lowest level since August 2025. The trigger was a report on March 6th that Oracle and OpenAI had abandoned their plans to expand an AI data center in Abilene, Texas. According to reports, the negotiations failed due to financing problems and changing demand forecasts on the part of OpenAI. The share price decline highlights how sensitive investors are to any sign of a slowdown in the buildout of AI infrastructure.
Credit profile begins to falter
At the same time, SoftBank’s credit profile is deteriorating noticeably. The group’s five-year CDS widened to around 380 basis points – an 11-month high and the widest spread among Japanese companies, around 100 basis points above Nissan. S&P Global cut its outlook to negative after SoftBank invested an additional $30 billion in OpenAI. The ratings agency warned it could take longer than expected to restore liquidity and quality to the portfolio.
To finance its AI ambitions, SoftBank is now seeking a bridge loan of up to $40 billion – the largest dollar-only borrowing in the company’s history. The loan should have a term of around twelve months; JPMorgan Chase is among four banks subscribing to the consortium. To finance its AI strategy, SoftBank has already sold its T-Mobile US stake, liquidated its entire Nvidia position and expanded margin loans against Arm shares.
Strong telecommunications division as a counterweight
The focus of the strategy is the OpenAI commitment: SoftBank has invested around $35 billion and therefore holds around 11 percent of the ChatGPT developer. In the December quarter, the group returned to profitability thanks to valuation gains from this investment – the Vision Fund posted a net result of 248.6 billion yen, after a loss of 369.2 billion yen in the same period last year. However, these are mostly unrealized book profits, not operating cash flow.
Advertisement
Should investors sell immediately? Or is it worth joining? SoftBank?
The telecommunications subsidiary SoftBank Corp. is more stable: In the first nine months of the current financial year, sales rose by 8.0 percent to 5,195.4 billion yen – a record. Operating profit increased by 7.6 percent to 884.1 billion yen. On this basis, the company raised its annual forecast for sales to 6.95 trillion yen and operating profit to 1.02 trillion yen.
Growing ambitions, growing risks
In addition to OpenAI, SoftBank is continuing to expand its AI portfolio: The planned acquisition of DigitalBridge for $4 billion is intended to accelerate the development of data center infrastructure. ABB’s robotics business is also to be acquired for $5.375 billion – a deal that is still awaiting approvals in Europe, China and the USA. CEO Masayoshi Son describes these steps as part of a strategy around “Physical AI”.
With the halted Stargate expansion in Texas, the ongoing credit process and the negative outlook from S&P, SoftBank is entering the final phase of its financial year. Whether the concentrated, externally financed AI bets are viewed as a viable strategy or as an overstretched financial structure will likely determine the price development in the coming months.
Advertisement
SoftBank shares: buy or sell?! New SoftBank analysis from March 12 provides the answer:
The latest SoftBank figures speak for themselves: there is an urgent need for action for SoftBank shareholders. Is it worth getting started or should you sell? In the current free analysis from March 12th you will find out what to do now.
SoftBank: Buy or sell? Read more here…
