SoftBank Seeks $5 Billion Loan Using Arm Stake to Power AI Expansion

SoftBank is reportedly in discussions to secure a $5 billion loan backed by its holdings in Arm Holdings. The move underscores the Japanese conglomerate’s push to accelerate its artificial intelligence (AI) ambitions while monetizing some of its most valuable assets.

Leveraging Arm Equity for Growth

The talks remain in early stages, but the proposal would see SoftBank pledging a portion of its Arm equity as collateral to obtain debt financing. Given that Arm now represents a significant part of SoftBank’s total value, the company is leveraging a relatively liquid and high-performing asset to raise funds.

While attention has centered on SoftBank’s larger bridge-loan discussions of around $16–$17 billion, this smaller $5 billion deal seems more targeted. It may serve as a focused effort to support specific AI-related projects rather than a broad capital-raising initiative.

SoftBank has explored multiple funding structures, including:

• Straight debt financing
• Mezzanine funding
• Project-based financing

These efforts are intended to back its ambitious “$500 billion” Stargate AI infrastructure project in the United States.

Balancing Opportunity and Risk

Using Arm shares as collateral offers both strategic advantages and potential downsides. On the upside, Arm’s strong post-IPO performance has strengthened SoftBank’s balance sheet. However, relying on that equity introduces risk—if Arm’s stock price falls, the collateral cushion could shrink, tightening SoftBank’s financial flexibility.

The company has employed similar tactics before, leveraging publicly traded holdings like Alibaba to raise margin or bridge loans. Yet, each instance comes with market-related volatility that can affect repayment terms and collateral value.

Fueling the AI Infrastructure Push

SoftBank’s latest financing plans align with its growing appetite for AI-related investments. The company recently acquired chipmaker Ampere Computing for $6.5 billion, a move designed to expand its presence in AI hardware and data infrastructure. The potential $5 billion loan would likely help fund this ongoing buildout—covering costs for chips, data centers, and large-scale computing systems.

Still, the deal’s completion is not guaranteed. Negotiations are ongoing, and lenders may impose strict terms given the volatility of the tech sector. SoftBank’s willingness to take on additional debt demonstrates both its confidence and urgency in securing a foothold in the intensifying AI race.

If finalized, the $5 billion loan would represent a strategic pivot for SoftBank—transforming its valuable Arm holdings into immediate capital for AI investments. The move reflects the company’s strong conviction in the long-term potential of artificial intelligence while raising questions about how much leverage it can safely sustain.

Observers will be watching closely to see how lenders value the deal and whether SoftBank can manage new debt without compromising its balance sheet or long-term strategy.