This delay follows a recent decision by the Japanese conglomerate to lower its initial loan target from $10 billion, prompted by lender apprehensions regarding OpenAI’s valuation of $852 billion and the difficulties associated with using shares from the privately held AI firm as collateral, the report indicated.
Prior to these recent events, SoftBank had reportedly garnered commitments amounting to around $5 billion, the report noted.
The news of the stalled negotiations led to a significant drop in SoftBank’s stock, which saw a decline of over 8-9% during trading in Tokyo on Wednesday. SoftBank, under the leadership of CEO Masayoshi Son, has positioned itself as a leading investor in the AI sector.
Recently, CEO Masayoshi Son reaffirmed his optimistic outlook on the technology, predicting that the AI revolution will far surpass the dot-com boom in scale.
This development arises as SoftBank seeks to uphold its credit rating while funding its ongoing AI-related projects without selling off core assets.
OpenAI, the developer of ChatGPT, has experienced rapid growth, yet it remains under scrutiny regarding its lofty valuation in the face of swift industry expansion and competition.
Overall, this situation underscores the disparity between the high valuations seen in private funding rounds for AI firms and the more cautious evaluations made by banks and creditors when issuing sizable loans.
Lenders have shown previous reluctance about valuing unlisted shares, such as those in OpenAI, particularly due to limited secondary market liquidity and concerns regarding downside protection.
(Edited by : Ajay Vaishnav)
