SoftBank Group's credit default swaps are hovering near their highest level in three years, as traders assess the potential impact of OpenAI's funding plans. OpenAI represents one of SoftBank's largest strategic bets to date, according to data provider CMA, with the Japanese conglomerate's five-year CDS standing at approximately 383.2 basis points, nearing levels not seen since 2023.
SoftBank has committed a total of $64.6 billion to OpenAI. The ChatGPT developer is currently in preliminary discussions with investors regarding a new funding round that could value the company at over $1.2 trillion, with the round expected to take place ahead of its highly anticipated initial public offering. OpenAI CEO Sam Altman earlier indicated that the long-awaited IPO remains on track but will not materialize this year.
Financing costs are clearly on the rise, analyst Sharon Chen noted in a Wednesday research report, pointing to widening spreads on SoftBank's offshore bonds driven by supply concerns and increasing exposure to OpenAI. Chen added that a potential delay in the IPO could postpone SoftBank's ability to monetize its OpenAI stake. SoftBank recently raised 1 trillion yen through retail bonds in Japan while simultaneously preparing for a potential overseas bond issuance. The widening CDS spreads could put pressure on the terms of any future bond offerings.
SoftBank's bet on OpenAI began in early 2023, when Masayoshi Son and the Vision Fund decisively entered the fray amid a governance struggle between Microsoft and OpenAI. Since then, investments have proceeded in stages. However, a fundamental mismatch persists between paper gains and actual cash liquidity. OpenAI remains unlisted, meaning its equity cannot be liquidated in public markets, yet SoftBank must continue fulfilling its investment commitments with real capital.
OpenAI's own financial condition is further heightening market concerns. In the first quarter of 2026, OpenAI generated $5.7 billion in revenue but posted a staggering operating loss of $9.3 billion, effectively losing $1.60 for every dollar earned. The second quarter saw operating losses widen further to $12.3 billion. HSBC projects that OpenAI's full-year cash burn for 2026 will reach $17 billion, translating to daily cash consumption exceeding $46 million. Revenue growth relies entirely on massive computational infrastructure investments, with no visible path to positive cash generation.
This situation implies that even if SoftBank completes its entire $64.6 billion capital injection, OpenAI will still require external funding in the foreseeable future. S&P Global Ratings has already revised SoftBank's credit outlook from stable to negative due to this investment, with analysts stating directly that while Arm's credit profile remains solid, OpenAI carries substantially higher risk as a startup facing significant AI innovation challenges and intense competitive pressure.