SoftBank Navigates a Turbulent Month with a $10B OpenAI Payout and a $700M OYO IPO

SoftBank is juggling two massive capital moves this week as it funnels a fresh $10 billion into OpenAI while preparing for a long-awaited IPO from its portfolio company OYO. The contrasting developments – one a high-stakes bet on artificial intelligence, the other a liquidity event from a hospitality disruptor – highlight the dual pressures facing Masayoshi Son’s technology conglomerate.

The latest tranche to OpenAI is part of a $30 billion commitment through the Vision Fund 2. A first installment went out in April, and the final payment is due in October. Once complete, SoftBank’s cumulative investment in the AI developer will hit $64.6 billion, representing roughly 13% of the company. The implied valuation for OpenAI stands at a staggering $730 billion.

To finance these outlays, SoftBank has drawn on a $40 billion unsecured bridge loan arranged by a consortium including JPMorgan, Goldman Sachs and Mizuho. The company says it will repay the debt gradually from existing assets, and management insists the loan-to-value ratio will stay below 25% under normal market conditions.

At the same time, Oravel Stays, the parent of budget-hotel chain OYO, is planning an initial public offering in India that could raise about $700 million. Proceeds will partly go to a Singapore subsidiary and partly be used to pay down debt. OYO operates across more than 35 countries, including the US and Europe, and the IPO would provide much-needed cash for SoftBank’s Vision Fund portfolio.

Should investors sell immediately? Or is it worth buying SoftBank?

The stock market, however, remains deeply unsettled. SoftBank shares closed Tuesday at €32.93 in one report and at €33.09 in another, reflecting a volatile session. Over the past 30 days, the stock has lost nearly 33% of its value. The annualised volatility has surged to about 115%, and on a weekly basis the shares fell another 6.8%. The relative strength index sits at 42.4, signalling a technically nervous environment.

SoftBank’s accounting treatment of its OpenAI stake adds another layer of risk: the holdings are marked to fair value through the profit and loss account, meaning any future change in OpenAI’s valuation will hit SoftBank’s earnings directly.

Away from the core AI bet, SoftBank has been active elsewhere. It recently invested in the search-engine start-up Perplexity AI at a $3 billion valuation and acquired US infrastructure investor DigitalBridge. Son has aggressively defended the strategy, dismissing warnings of an AI bubble as “blasphemy” and arguing that the technology is still in its infancy.

The looming OYO listing offers a rare positive catalyst amid the rout. If the $700 million debut succeeds, it would provide SoftBank with fresh liquidity to support further AI investments – and perhaps buy time as the market awaits returns from the massive OpenAI wager.