SoftBank takes on junk-bond debt at record yields to fund OpenAI ambitions

Billionaire Masayoshi Son’s SoftBank Group has pushed through one of the largest junk-bond offerings on record, dangling yields above anything it’s paid before in an effort to fund its massive artificial intelligence ambitions.

The company raised roughly $11 billion in debt, spread across dollars and euros, making the Japanese conglomerate the biggest corporate junk-bond borrower in the world, data shows. While it drew enough demand to lower pricing, borrowing costs were still largely higher than it has had to pay before, according to the data.

The firm sold $1 billion of 3.5-year bonds at a yield of 8.625% and $4.5 billion of 5.5-year securities at a yield of 9.25%, according to a person familiar with the matter. The longer-dated $4.5 billion 7.5-year tranche priced to yield 9.75%, the person added, asking not to be identified because they’re not allowed to speak publicly.

The yields are the highest-ever for SoftBank dollar bonds on a day when benchmark U.S. Treasury rates soared to two-decade highs.

The firm also sold €1 billion ($1.14 billion) of euro-denominated notes in two parts, with maturities of four and six years. The longer-dated tranche priced at a yield of 8%, also a record for the tenor in the currency.

SoftBank’s deal was seen by some as a litmus test for how debt investors are thinking about financing artificial intelligence at a time of rapid developments as well as increasingly dire warnings about the technology’s risks and the need to impose guardrails around its growth. 

SoftBank has been active in debt markets this year to help fund commitments nearing $65 billion to ChatGPT creator OpenAI, as well as more mergers and acquisitions in the sector.

As of late afternoon Wednesday in Asia, orders for the $10 billion dollar part of the deal had exceeded $30 billion, people familiar with the matter said. That allowed SoftBank to reduce yields from initial ranges.

The flood of AI funding has made some bond investors uneasy, with global AI-related debt issuance already topping $575 billion in 2026, according to a recent report by Goldman Sachs Group credit strategists. The concern is that the ever-growing pile of debt threatens to cause a hangover for markets if the technology fails to pay off for the firms making the biggest investments.

The skittishness is reflected in the market for SoftBank’s credit default swaps. The price to insure against a failure to pay over the next five years rose this month to its highest since April 2025, when the bank disclosed a $30 billion investment in OpenAI.

Son, for his part, has downplayed concerns about investments in AI infrastructure, and said earlier this year he expects AI-related industries to account for 20% of global output by 2040, equivalent to $46 trillion.