SoftBank CDS Approaches Three-Year High! Concerns Over OpenAI Financing Intensify, “Paper Wealth” Fails to Alleviate Cash Crunch

According to Jinse Finance APP, the credit default swap (CDS) of SoftBank Group is hovering near a three-year high. Traders are assessing the possible impact of OpenAI's financing plan, which is one of SoftBank's biggest bets. According to data provider CMA, SoftBank’s five-year CDS is quoted at about 383.2 basis points, close to the highest level since 2023.

SoftBank has committed to invest $64.6 billion in OpenAI. The ChatGPT developer is in preliminary talks with investors for a new round of financing that may value the company at over $1.2 trillion and will take place before its initial public offering (IPO). OpenAI CEO Sam Altman previously stated that the company’s long-awaited IPO is still in progress but will not happen this year.

“Financing costs are rising,” analyst Sharon Chen wrote on Wednesday, noting that offshore bond spreads for SoftBank have widened due to supply concerns and increased exposure to OpenAI. She added that a delay in the IPO could postpone SoftBank’s ability to cash out its OpenAI stake.

SoftBank recently raised 1 trillion yen in Japan through retail bonds and is also preparing a potential overseas bond issuance. Wider CDS spreads could put pressure on the terms of future bond issuances.

SoftBank’s bet on OpenAI began in early 2023, when Microsoft and OpenAI were locked in a governance dispute and Masayoshi Son swiftly led the Vision Fund to invest, with subsequent investments proceeding in stages.

However, there is a fundamental mismatch between paper gains and cash liquidity. OpenAI is still not publicly listed, so its equity cannot be monetized in the open market, while SoftBank continues to be required to honor its investment commitments in real cash.

OpenAI’s own financial situation is also intensifying market concerns. In the first quarter of 2026, OpenAI’s revenue was $5.7 billion, but its operating loss reached $9.3 billion, losing $1.60 for every $1 earned; in the second quarter, operating losses further widened to $12.3 billion.

HSBC predicts that OpenAI’s total cash burn in 2026 will reach $17 billion, with a daily cash outflow of over $46 million. Revenue growth relies entirely on increased computing power investments and has yet to create a self-sustaining positive cash flow. This means that even if SoftBank completes its full $64.6 billion investment, OpenAI will continue to need external funding for the foreseeable future.

S&P Global Ratings has downgraded SoftBank’s credit outlook from stable to negative due to this investment. Their analysts commented directly: “Arm’s credit profile is solid, but OpenAI is very risky. It’s a startup that faces significant AI innovation risks and intense competition.”