SoftBank shares rise on $1.86B debt offering as CEO talks up AI

SoftBank shares rise on $1.

• SoftBank announced plans on Friday to issue euro- and dollar-denominated bonds to reduce debt and focus on artificial intelligence investments.
• The Japanese holding company will issue approximately $900 million in U.S. dollar-denominated bonds across two tranches, and €900 million (approximately $962.8 million) worth of bonds, also in two tranches.

OUR TAKE
This move will not only help optimise SoftBank’s financial structure but also accelerate its position in global technology competition, strengthen its role as a leading technology firm, and establish a solid foundation for future technological innovation and market leadership.
–Revel Cheng, BTW reporter

SoftBank on Friday announced plans to issue euro- and dollar-denominated bonds as it looks to pay down debt and focus its investments on artificial intelligence.

What happened

SoftBank on Friday announced plans to issue euro- and dollar-denominated bonds as it looks to pay down debt and focus its investments on artificial intelligence.

The huge Japanese holding company said it will issue around $900 million in U.S. dollar-denominated bonds in two tranches, and 900 million euros, or $962.8 million, worth of bonds, also in two tranches. These will have interest rates ranging between 5.4% and 7% per annum.

SoftBank said the money raised will be used for “repayment of indebtedness and for general corporate purposes.”

Its shares closed up 2.5% after news of the bond issuance.

SoftBank and its founder Son have made major AI investments recently that underscore expectations they will quicken their pace of activity in that area. The Japanese firm this year directly invested $200 million into Tempus AI Inc., a startup that analyses medical data for doctors and patients to come up with better treatments. More recently, it backed Perplexity AI at a $3 billion valuation, betting on a firm that aims to use AI to compete with Alphabet Inc.’s Google search.

Also read: SoftBank Group forms joint venture ‘SB TEMPUS’ with Tempus

Also read: SoftBank sets up AI healthcare joint venture with Tempus AI

Why It’s important

The raising of money via debt comes as SoftBank’s overall financial losses have begun to narrow as it logs some successes, including the initial public offering of chip designer Arm.

Meanwhile, the company, which runs a massive technology investment arm called the Vision Fund, has also suggested it is looking to ramp up investments in artificial intelligence companies.

Longer term, SoftBank’s working on a plan to deploy some $100 billion into AI-related chips in a project dubbed Izanagi.

In a rare public appearance this month, Masayoshi Son, founder and CEO of SoftBank, talked of a concept he called artificial super intelligence, or ASI. He said this refers to AI that is 10,000 times smarter than humans, which he expects to exist within 10 years.

SoftBank is likely looking to capitalise on improving investor sentiment toward the company, highlighted by a 65% year-to-date rise in its shares.