SoftBank credit risk hits 4-year high as AI profitability worries shake markets

The cost of insuring against a default for SoftBank Group jumped to its highest in four years on Friday, reaching 466 basis points, as concerns over AI profitability roiled global financial markets. SoftBank is considered a bellwether for AI investment due to its $64.6 billion stake in OpenAI and 90% ownership of chip designer Arm. Its credit risk has risen as it took on more debt to fund the OpenAI stake, while OpenAI delayed its public offering to 2027. The Democratic Party's sweeping wins in this week's US midterm elections fueled fears of slower AI infrastructure development, potentially putting one-third of US data centre capacity at risk in states where governors may slow projects.