SoftBank's AI Ambitions Hit a Double Snag: OpenAI's IPO Delay and a Record Short Squeeze

SoftBank shares dropped 12% after Altman ruled out an OpenAI listing this year, extending its funding bridge as short-squeeze risk hits a critical level.

SoftBank Group is navigating a tricky stretch on two fronts at once. On one side, the Japanese conglomerate's biggest artificial-intelligence bet just lost its near-term exit route. On the other, a surge in its share price has turned a crowded short trade into a potential powder keg.

The stock fell 12% to EUR 32.74 in Monday trading after OpenAI chief executive Sam Altman ruled out a stock-market listing for the AI developer this year. SoftBank has committed roughly USD 64.6 billion to OpenAI, banking on a swift liquidity event via the public markets. That timeline has now slipped to 2027 at the earliest.

Safety Concerns Push OpenAI's Listing to 2027

Altman, in a magazine interview with Fortune published Saturday, tied the decision directly to AI safety. He called the present moment a poor window for a market debut given the current state of the technology's development. OpenAI, he said, will only approach public investors once both its own business and broader societal readiness are in place.

The caution is not isolated. Anthropic chief Dario Amodei published an essay calling on the industry and governments to deliberately slow the pace of developing the most advanced models, pointing to the risks of recursive self-improvement and a recent incident involving autonomous AI agents. Anthropic also sits in SoftBank's portfolio. Together, the two executives have applied the brakes to a sector whose unbridled monetization large investors had been counting on.

A Funding Calendar That Just Got Longer

The IPO delay lands in the middle of heavy financial maneuvering. SoftBank recently secured an USD 11.87 billion loan from roughly 20 banks to shore up its OpenAI stake, according to Bloomberg — above the USD 10 billion target management had initially floated. The facility runs for two years.

At the same time, the group faces billions in repayments. On Tuesday, September 15, it plans to retire the remaining USD 25.9 billion of an earlier USD 40 billion loan taken out for the OpenAI investments. To refinance, management under finance chief Yoshimitsu Goto is sounding out investors for a US-dollar high-yield bond of USD 10 billion to USD 20 billion. With OpenAI's listing pushed back, SoftBank's financing architecture now faces a far longer bridge period than the market had assumed.

The Squeeze That Won't Let Go

Yet the equity story has been running in the opposite direction. Since the start of September, the shares have climbed 25.3%, up from 5,200 yen at the end of August, according to Reuters and MSN. That rally has heaped pressure on short sellers. Bloomberg reported last Thursday that the short-squeeze risk has reached a critical level: shorted shares now account for 2.27% of the free float, the highest since July 2025, with the notional value of those bearish bets at about USD 3.9 billion — the most since early 2015.

Should prices keep rising, forced covering could add further fuel to the advance. Part of the recent momentum came from Arm Holdings, the listed subsidiary, whose strong US session on September 5 helped drive an 11.78% jump for SoftBank in Tokyo the same day.

Junk-Rated Borrowing Meets an Overbought Chart

The refinancing push continued last Friday, when SoftBank priced a new retail bond in Japan worth one trillion yen (about USD 6.3 billion). The seven-year notes carry a 4.75% coupon, at the top of an initially guided 4.3% to 4.9% range. As the Japan Times notes, SoftBank's credit profile lags US tech giants such as Alphabet and Amazon, which hold AA-range ratings; S&P Global rates SoftBank at BB+, the top rung of speculative-grade, or junk, territory. Beyond the yen deal, the company is still weighing dollar- and euro-denominated bonds of USD 10 billion to USD 20 billion to firm up its capital structure.

The market mood, for now, remains upbeat. The stock closed at EUR 37.40 in German trading last Friday, up 2.2%, extending a 30-day gain of 20%. Technicals, though, are flashing caution: the 14-day Relative Strength Index sits at 70.8, above the 70 threshold that analysts typically read as an overbought signal. After two weeks of rapid gains, the shares look vulnerable to profit-taking should the buying pressure from short covering fade.