WSJ Tech News Briefing
TNB Tech Minute: SoftBank Plans Unprecedented Retail Bond Issuance
· Summarized
Key takeaways
- SoftBank is issuing a record $6.3 billion bonds to fund its aggressive AI investments, demonstrating its commitment to leading in the AI space.
- Alibaba is raising over $10 billion to enhance its AI capabilities, despite concerns about stock dilution and a significant dip in profits.
- TikTok has settled a major privacy lawsuit by paying $400 million, and has taken steps to improve its safety measures for younger users.
Summary
SoftBank's Record Bond Issue to Fund AI Investments
SoftBank Group announced plans to issue a historic 1 trillion yen (approximately $6.3 billion) in retail bonds to support its expanding investments in artificial intelligence, including significant commitments to OpenAI and related infrastructure projects. The bonds, scheduled to be priced on September 4th, will also be used to repay existing bonds. This move highlights SoftBank’s aggressive push into AI, with over $60 billion in investments and commitments to OpenAI. The funds will bolster its AI infrastructure and showcase its dedication to leading the AI race.
Alibaba's Strategic Share Placement to Boost AI Infrastructure
Alibaba is planning to raise over $10 billion through a share placement of 710 million new shares at about HKD 112 each—a notable discount to the previous closing price. This capital infusion is aimed at enhancing Alibaba’s AI capabilities and infrastructure, fueling its competitive efforts in AI development. The share offering has caused its stock to drop as much as 10% amid fears of dilution. Alibaba’s aggressive investment reflects its commitment to emerging AI markets amidst a challenging quarter that saw a 76% decline in net profit.
TikTok and DOJ Settlement Over Children's Privacy Allegations
The Justice Department reached a $400 million settlement with TikTok over allegations that the platform violated the Children’s Online Privacy Protection Act by collecting data from children under 13 without parental consent. TikTok agreed to pay $300 million upfront and an additional $100 million after vacating a prior consent decree linked to Musical.ly. The platform has since updated its privacy safeguards for young users, and the DOJ acknowledged TikTok’s efforts to improve compliance. TikTok and its owner, ByteDance, did not respond immediately to requests for comment.
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Show notes
Plus: Alibaba to raise $10.2 billion for AI investment with share placement. And the Justice Department and TikTok reach $400 million settlement over children’s privacy suit. Julie Chang hosts.
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