SoftBank Seeks $5 Billion Margin Loan Backed by Arm Stock

Core Viewpoint - SoftBank Group Corp. is negotiating a $5 billion margin loan from global banks to bolster its investments in artificial intelligence, particularly in OpenAI, amid a broader strategy to capitalize on the AI boom [1][2][4]. Group 1: Financial Moves - The margin loan will be secured by shares of SoftBank's chip unit, Arm Holdings Plc, and is part of a larger strategy to increase investment in AI technologies [2][4]. - SoftBank has previously raised a total of $13.5 billion in margin loans against Arm shares, with $5 billion still undrawn as of March 2025, which will increase to $18.5 billion with the new loan [5]. - The group had secured approximately $8 billion in margin loans prior to Arm's IPO in 2023, facilitated by eleven banks including JPMorgan Chase & Co. and Goldman Sachs [6]. Group 2: Market Reaction - SoftBank's shares experienced a decline of up to 4.1% to 22,020 yen, closing down 3.1%, marking the largest drop since September 26 [3]. - The group's dollar bond due in 2032 also fell by about 1 cent on the dollar to 102.7, indicating market concerns [3]. Group 3: Strategic Investments - Founder Masayoshi Son has committed up to $30 billion towards OpenAI and acquired ABB Ltd.'s robotics arm for $5.4 billion, reflecting a significant push into AI investments [4]. - Son's aggressive investment strategy is aimed at positioning SoftBank as a key player in the anticipated growth of AI technologies [7].