Japan’s SoftBank Group plans to issue a record ¥1 trillion ($6.3 billion) in seven-year retail bonds to fund artificial-intelligence investments, marking its largest debt offering yet and reflecting a global surge in AI-related fundraising.
SoftBank Group, the Japanese technology conglomerate, has unveiled plans to raise $6.3 billion through a ¥1 trillion retail bond offering, the largest of its kind in Japan. The seven-year bonds, set to be priced on September 4, carry an indicative coupon range of 4.3% to 4.9%, according to regulatory filings and company disclosures. The move underscores SoftBank’s aggressive bets on artificial intelligence, including its $60 billion commitment to OpenAI, and aligns with a broader global trend of tech firms securing capital for AI infrastructure.
The Scale of the Offering
This bond sale would surpass SoftBank’s previous record of 600 billion yen, issued in April 2025, and nearly double the size of its last major debt offering. The funds are earmarked for AI-related investments, including data center expansions and partnerships with firms like OpenAI. The company has also been raising capital through asset sales, such as its holdings in Nvidia and T-Mobile, to finance its AI ambitions.
The issuance comes as global tech giants, including Alphabet, Meta, Microsoft, and Amazon, pledge over $2.4 trillion for AI infrastructure. Chinese e-commerce giant Alibaba recently raised $10 billion in a share placement to bolster its AI capabilities, highlighting the intensity of the race for dominance in the field.
Market Reactions and Analyst Perspectives
Analysts suggest SoftBank is betting on retail investors to absorb the bonds, given the limited yield options in a high-inflation environment. The company is betting that retail investors will buy a product offering an attractive yield, and it appears confident it can tap demand at a time when there are few fixed-income products that can beat inflation,
said Yuuki Fukumoto, a senior financial researcher at NLI Research Institute.
However, banks face challenges in underwriting the deal due to weak deposit growth and the bonds’ seven-year duration. Banks are finding it difficult to take on the risk given weak deposit growth, the credit rating and the seven-year duration, leaving the deal more reliant on retail investors,
Fukumoto added.
SoftBank’s bond offering is its third retail sale this year, following ¥418 billion in April and ¥260 billion in June. Despite the new issuance, the company still faces a funding shortfall exceeding $20 billion, according to Bloomberg Intelligence analyst Sharon Chen, who noted the likelihood of offshore bond sales in the near term.
Regulatory and Credit Implications
SoftBank’s bonds are expected to receive an A rating from Japan Credit Rating Agency Ltd., according to the company’s press release. S&P Global Ratings upgraded its outlook on SoftBank to stable from negative in July, citing improved financial ratios. However, the firm’s long-term issuer credit rating remains at BB+, one notch below investment grade.
The company has also explored alternative funding avenues, including a margin loan backed by its OpenAI stake, which reduced its fundraising target from $10 billion to $6 billion. This flexibility reflects the high stakes of its AI investments, even as concerns about overcapacity and corporate debt linger in the sector.
Broader Context of the AI Funding Race
SoftBank’s bond sale is part of a hyper-competitive global push to dominate AI. The firm’s $60 billion commitment to OpenAI positions it as a key player in the development of large-language models, while its data center investments aim to secure computing capacity for future growth. This strategy mirrors efforts by other tech titans, who are pouring billions into chips, data centers, and AI research to maintain competitive edges.
The scale of these investments raises questions about sustainability. Critics point to the circular nature of many AI fundraising deals and the risk of overcapacity as firms race to outspend one another. Yet for SoftBank, the bond offering represents a calculated move to maintain its influence in a rapidly evolving market.
