SoftBank raises $1.86 billion as it looks to double down on AI

Global investor SoftBank Inc. this week announced plans to issue euro- and dollar-denominated bonds to raise a combined $1.86 billion as it seeks to repay debt and sharpen focus on investments in the artificial intelligence (AI) domain.

Shares of SoftBank rose 2.5% on Friday on news of one of the biggest foreign-currency deals by a Japanese firm this year.

The Japanese company said in a statement that it would issue around $900 million in dollar-denominated bonds in two tranches, and €900 million (about $963 million) worth of euro-denominated bonds, also in two tranches.

The bonds will have interest rates between 5.375% and 7%, the SoftBank statement showed.

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

“SBG intends to redeem its USD-denominated senior notes due September 2024 in July 2024, prior to its final maturity, pursuant to the optional redemption provisions thereof,” the statement read.

The fundraising via debt comes even as SoftBank is doubling down on its investments in AI.

On Thursday, the SoftBank launched a joint venture with Tempus AI, a startup that analyzes medical data for doctors and patients to come up with better treatments, the latest in a string of AI investments the Japanese technology investor has made.

The Japanese firm in April infused $200 million into Tempus AI in a series G round before it listed on the Nasdaq this month.

SoftBank and Tempus AI are expected to each invest 15 billion yen ($93 million) into the venture, which is expected to close in July, SoftBank said in a separate release.

SoftBank said that the service will combine Tempus’s data on about 7.7 million cancer patients in the US and information obtained through a partnership with hospitals in Japan for AI analysis.

This analysis will help design tailored treatments for each patient, curbing side effects and enhancing drug efficacy.

Initially, the primary focus of this service will be cancer, the most significant cause of death in Japan, and will also include heart disease, added the investor.

SoftBank, meanwhile, is also a significant investor in the Indian market, with total investments in the country at close to $14 billion last year. The Japanese investment firm has stakes in Paytm, Flipkart, Swiggy, Ola, FirstCry, and PhonePe.

The investment conglomerate, which has been going slow on investments, has announced plans to resume investment activity from mid-2024.

The firm plans to focus on growth-stage startups and new-age companies, with key areas of interest remaining technology, e-commerce, and AI.

In other AI investment made this week, SoftBank said it would invest up to $20 million in Perplexity AI at a $3 billion valuation, betting on a firm that aims to use AI to compete with Alphabet Inc.’s Google search.