SoftBank credit risk jumps to 4-year high as AI fears roil market

Business Recorder reported that the cost of protection against a SoftBank Group default climbed on Friday to its highest level since October 2022. Its five-year credit default swap spread gained 22 basis points to 466 bps, according to Markit data.

Investors are focusing on SoftBank’s finances as it borrows at record yields to support its OpenAI investment, while the startup’s planned public offering has been deferred to 2027. SoftBank is also viewed as an indicator of AI investment prospects, given its $64.6 billion commitment to OpenAI and 90% holding in chip designer Arm.

Concerns about the returns from AI spending have unsettled markets, with US midterm election results adding worries about slower infrastructure development. A Futurum Group report said planned data centres representing one-third of US capacity could face delays because they are located in states where governors may slow projects.