TNB Tech Minute: SoftBank Racks Up Debt to Fund Massive OpenAI Bet
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Viking, committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, cultural enrichment, and all-inclusive fares. Discover more at viking.com. Here's your TNB Tech Minute for Tuesday, April 1st. I'm Victoria Craig for The Wall Street Journal. The key to SoftBank's fresh $40 billion injection into open AI? Debt. And lots of it.

Last week, we told you the artificial intelligence platform was finalizing its latest funding round, by far one of the biggest startup fundraisers of all time. To fund the first $10 billion, SoftBank will borrow from Japanese bank Mizuho and other lenders. It expects that financing to be completed in April, with the remaining three-quarters of the total investment to come by early 2026.

This debt financing strategy isn't a new one for SoftBank, but it isn't without risk. Early tech leaders often falter, and none of the startups with early leads in generative AI have shown that they can operate profitably. Ratings agency S&P said today that SoftBank's financial position will, quote, likely deteriorate as a result of this open AI investment, and it could lead to a ratings downgrade.

Staying with AI, the head of Meta's AI Research is leaving the company in May after overseeing the department for nearly eight years. Joël Pinot's departure comes at a time the company is locked in a high-stakes race with rivals Amazon, Microsoft, and OpenAI to develop cutting-edge artificial intelligence technologies.

Meta plans to spend up to $65 billion this year as it ramps up spending on AI data centers. That's an almost 70 percent jump from last year's allocation. In a LinkedIn post, Pinot said it's time for Meta to create space for others to pursue its next chapter as the world undergoes significant change and the race for AI accelerates.

Finally, Visa wants to unseat MasterCard as the payment network for Apple's credit card. The Apple Card, as it's known, has racked up $20 billion in balances thanks to consumers who use it not just to make purchases from the tech giant, but for everyday transactions.

The current issuer Goldman Sachs is getting out of consumer banking, leaving question marks around not only who will take over as issuer, but as the payment network behind the card. Networks provide the infrastructure that relays transaction information between merchant and consumer banks. Visa has offered Apple $100 million as part of an aggressive pitch to win the card. American Express, meanwhile, is also in the mix, and MasterCard is trying to maintain its standing as the network behind the card.

For a deeper dive into what's happening in tech, check out Wednesday's Tech News Briefing podcast.