SoftBank’s OpenAI bet and rising debt are raising liquidity crunch concerns

The logo of SoftBank is displayed at a company shop in Tokyo, Japan January 28, 2025. Issei Kato | Reuters SoftBank's ascent to becoming Japan's most valuable company has put the spotlight on the conglomerate, raising questions whether it is taking on too much risk through its highly leveraged bet on artificial intelligence. Shares of the Japanese technology investment giant, led by founder Masayoshi Son, have surged about 70% this year on investor enthusiasm over AI, buoyed by the soaring valuation of chip designer Arm Holdings and expectations that OpenAI could see a blockbuster initial public offering this year. The rally helped SoftBank dethrone Toyota in market capitalization rankings earlier this week, cementing a dramatic turnaround for a company that only a few years ago was reeling from losses tied to its failed WeWork bet. SoftBank's cumulative investment losses in WeWork exceeded $14 billion . Analysts whom CNBC spoke to warned that the market's renewed optimism on SoftBank is also masking mounting balance-sheet risks. "Softbank has made itself into a highly leveraged bet on AI which carries significant upside as well as risk," said Gil Luria, head of technology research at Davidson equity capital markets. Stock Chart Icon Stock chart icon Softbank shares since the start of the year The company participated in OpenAI's funding round last year at a reported $300 billion valuation and has continued to deepen its involvement. …