Apollo Global Management is in discussions with SoftBank Group over a potential increase in a loan backed by assets held in the Japanese conglomerate’s Vision Fund 2, as SoftBank seeks additional financing for its substantial investment in OpenAI, according to a report by Bloomberg.
The proposed facility could rise to $9bn from its current $5.4bn, according to people familiar with the matter. The size of the potential increase has not been finalised, and the discussions may not result in a revised agreement.
Representatives for Apollo and SoftBank reportedly declined to comment.
Apollo originally provided the net-asset-value (NAV) loan to Vision Fund 2 in 2021. The financing was expanded by $900m last year to reach $5.4bn.
NAV lending allows private capital managers and investment funds to raise liquidity against the value of their underlying portfolios. For SoftBank, the facility provides an additional source of funding as it commits increasingly large sums to artificial intelligence investments.
The potential loan increase comes as SoftBank continues to expand its exposure to OpenAI, the creator of ChatGPT. The Japanese group has committed approximately $64.6bn to the AI company, while also exploring additional borrowing against its OpenAI holdings.
In August, SoftBank secured a $10bn margin loan backed by its stake in OpenAI from a group of lenders that included Apollo.
The scale of SoftBank’s AI spending has increased scrutiny of its financing requirements and credit profile. Credit-default swaps on the conglomerate rose to a three-year high this week, reflecting heightened investor concern over its exposure to OpenAI and broader questions surrounding AI-related risks.
SoftBank has also held meetings with investors in New York regarding a potential overseas high-yield bond offering that could raise between $10bn and $20bn, according to people familiar with the plans.
Vision Fund 2, which had more than $100bn in committed capital as of February, has made over 300 investments since its launch and has recently increased its activity in OpenAI.
