BREAKINGVIEWS-Masayoshi Son represents fragile link in AI chain

By Karen Kwok and Liam Proud

LONDON, March 30 (Reuters Breakingviews) - Sam Altman and Masayoshi Son are becoming something of a double act. OpenAI's founder is the public face of the artificial intelligence boom, while the Japanese billionaire increasingly positions himself as its financial enabler. By the end of this year, his SoftBank Group 9984.T empire will have pumped $65 billion of equity into the ChatGPT developer, dwarfing the contributions of other major backers including Microsoft MSFT.O, Amazon.com AMZN.O and Nvidia NVDA.O.

Strains are showing, however. SoftBank's debt is rising, and the $140 billion conglomerate's options to free up more cash all come with downsides. It's time for Altman and the wider AI community to start contemplating what life might be like without Son's checkbook.

SoftBank has become a uniquely important OpenAI investor since it first bought a stake in September 2024. It wasn't long before the Japanese investor replaced Microsoft as Altman's biggest funder, in terms of dollars committed. SoftBank also holds a distinction as one of the only backers that isn't simultaneously relying on the startup as a customer. Others stand to generate extra revenue by funding model developers, which arguably makes them less sensitive to the price tag.

It follows that Son has effectively become the pivotal arbiter of OpenAI's valuation, now $840 billion. SoftBank is also deeply intertwined with Altman's $500 billion Stargate data centre project. The tight connection echoes Son's support of Alibaba's Jack Ma and WeWork's Adam Neumann, but in an even more exaggerated way.

One issue is that SoftBank's investments are straining its own balance sheet. The critical metric, for both Son and credit rating agencies, is the loan-to-value ratio. It measures the amount of borrowing against the Japanese company's vast portfolio of holdings. The latest net debt figure is about $50 billion. SoftBank's assets include microchip designer Arm ARM.O, the Vision Fund startup portfolios, a Japanese mobile operator, and more. Combined, they are worth about $280 billion on paper, using Friday's prices for the listed shares. This implies a seemingly comfortable 18% LTV.

The headroom to Son's self-imposed 25% limit in "normal times" suggests there's $20 billion of extra borrowing capacity. It isn't enough to fund the $30 billion pledged to OpenAI in the coming months, let alone the $8.5 billion committed to buy other assets such as ABB Robotics. Son on Friday secured a 12-month, $40 billion bank-provided bridge loan to plug the gap, but that's only a temporary fix. He will have to raise money in other ways to repay that debt and bring the LTV back within its limits.

There are several levers available to pull. One would be to sell a $6 billion stake in wireless provider T-Mobile US TMUS.O. SoftBank's Vision Funds also own $25 billion of publicly traded shares, based on end-2025 prices. Selling such stock, however, only swaps one debt problem for another. Raising cash in this way already slashed the proportion of liquid assets in the portfolio from 75% in March 2025 to 51% in December as the OpenAI investment grew. S&P Global Ratings cited this trend as a serious concern when it revised SoftBank's credit outlook to "negative" recently. Fewer easily sellable assets arguably make the LTV metric less meaningful, since SoftBank couldn't necessarily liquidate privately traded ones for the recorded prices if needed.

Instead of offloading shares, Son could borrow more against them. Margin loans don't factor into SoftBank's preferred definition of net debt, since banks would simply seize the pledged equity in a default rather than coming for the Japanese group. It's unclear, though, how much wiggle room Son has. Loans secured against SoftBank's domestic telecom company are already close to 30% of the stake's value, according to Breakingviews calculations. The threshold is often considered a ceiling for asset-backed finance, one banker familiar with the market says.

SoftBank's borrowing against its Arm stake seems much lower in relative terms, at 15% of its current value, based on Breakingviews estimates. But the UK-based company's volatile stock price, a product of its slim 13% free float, may limit how much more Son can borrow.

Another option is to raise more debt against the Vision Funds. SoftBank touted $90 billion of "late-stage" investments as of December, including UK neobank Revolut, TikTok parent ByteDance and OpenAI itself. Buyout shop Apollo Global Management APO.N, as of last August, had already lent more than $5 billion against Vision Fund 2 collateral, Bloomberg reported. There may be scope for more, since its assets have ballooned since then, propelled by the rising OpenAI investment.

SoftBank's finance chief Yoshimitsu Goto said in February that the company is exploring an asset-backed margin loan against its OpenAI shares. Even so, this would amount to borrowing against OpenAI shares to buy more of them, which sounds oddly, and dangerously, circular.

It seems just about possible that Son, using some combination of these measures, would be able to repay the $40 billion bridge loan being used to fund existing commitments. As a result, however, SoftBank will be a much less creditworthy group, risking a downgrade further into junk territory by S&P, and therefore higher borrowing costs. In that sense, it's hard to see how Son could pump yet more money into OpenAI next year, for example. The five-year price of insuring against a default on SoftBank's yen-denominated debt has risen to about 370 basis points, compared with 200 basis points last October.

Son has weathered worse. SoftBank lost almost $160 billion of market capitalisation between February and August 2000, as the dot-com bubble burst. The company survived and went on to make money on Arm, Uber Technologies UBER.N and more. It would really help this time if a flood of Vision Fund companies, especially OpenAI, pursued initial public offerings. If new investors validate the private marks – a genuinely big if – Son's portfolio would instantly be more creditworthy, potentially allowing him to raise yet more debt against the newly listed shares.

Nonetheless, depending on an OpenAI IPO represents a sea change in itself. It suggests that Son's role as a driving force behind the valuation is waning. The risk is that cooler-headed public-market investors take a dimmer view of what Altman's technology is worth, potentially slowing its fundraising efforts and therefore OpenAI's growth. In that scenario, the consequences would ripple far beyond both men.

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