SoftBank's $4.8 Billion T-Mobile Share Sell Fuels AI Ambitions

SoftBank Group has made a strategic move by selling shares of T-Mobile for approximately $4.8 billion, as part of its funding effort for ambitious artificial intelligence projects. This liquidation is aimed at fostering significant advancements in AI technology.

The Tokyo-based tech conglomerate sold 21.5 million shares of T-Mobile at $224 per share, a price positioned at the lower end of the $224 to $228 range. This represents a 3% discount off T-Mobile's closing price of $230.99 on Monday and was executed through an unregistered overnight block transaction.

SoftBank is ramping up its investment with the intention to push AI's capabilities beyond what human reasoning can achieve. The group plans to inject up to $30 billion into OpenAI while collaborating with it to invest hundreds of billions more in data centers and related infrastructure globally. Their initial debt financing plans had encountered obstacles due to uncertainties in U.S. tariff policies.

Following the announcement of the transaction, T-Mobile's share price fell 3.9% in after-hours trading, although it had risen by 4.7% so far this year as of Monday's close. Meanwhile, SoftBank's stock in Tokyo increased by 2.3% in early trading.

This transaction exemplifies SoftBank founder Masayoshi Son leveraging past investment successes, such as the significant returns from early bets on Alibaba Group, to finance new business ventures. In April 2020, T-Mobile completed its $26.5 billion acquisition of Sprint Corp, which resulted in SoftBank acquiring T-Mobile shares. Later that year, SoftBank significantly reduced its stake through a $21 billion transaction, facilitating a record-breaking stock buyback.

The sale constitutes approximately 1.9% of T-Mobile's publicly traded shares. According to SoftBank's annual report, as of March 31, the company held 85.4 million shares of T-Mobile, equivalent to a 7.5% ownership stake. Deutsche Telekom is T-Mobile's largest shareholder, with a 59% interest, as per a U.S. Securities and Exchange Commission document dated June 12.

Terms indicate that Bank of America served as the sole bookrunner for this transaction.