SoftBank share price tumbles 14%| What investors need to know

Shares of SoftBank Group Corp plunged more than 14% in Tokyo on Monday, 14 September, marking their steepest one-day decline since late June. The selloff comes as investors reassess the Japanese technology investor’s aggressive bets on artificial intelligence and the potential returns from the billions of dollars being poured into the sector.

The latest pressure followed comments from OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei, who, over the weekend, backed a more measured approach to developing advanced AI models, citing safety concerns, according to reports. Anthropic is also planning to introduce additional safeguards, including assessments by independent third parties, according to reports.

SoftBank’s massive OpenAI bet in focus

The developments have put SoftBank’s exposure to OpenAI back in focus. The Japanese conglomerate is among the ChatGPT maker’s largest financial backers, with its total investment in OpenAI expected to approach $65 billion by October, according to reports.

SoftBank founder and CEO Masayoshi Son has continued to make large investments in AI while expanding the company’s borrowing to fund its strategy. The group is also pursuing other major AI-related bets and exploring data-centre developments across multiple markets.

The scale of these commitments has raised concerns over whether AI-related investments will generate meaningful returns quickly enough, particularly if the pace of development slows.

“There’s worry that OpenAI’s value may not be as high as previously expected,” Daiwa Securities chief strategist Yugo Tsuboi said, according to reports. He added that investors were closely watching whether the pace of AI development could moderate.

Rising debt adds to investor concerns

SoftBank’s growing leverage is another concern for investors. The company is planning a ¥1 trillion ($6.5 billion) retail bond sale and has arranged a $10 billion loan linked to its OpenAI stake.

The group is also financing other major transactions, including the planned acquisitions of ABB Robotics and DigitalBridge, according to reports.

SoftBank shares down 30% from June peak

Monday’s decline extends a broader retreat in SoftBank’s stock. Shares are now down roughly 30% from their June peak.

SoftBank Group Corp shares closed at ¥5,839 on Monday, 14 September, down ¥701 or 10.72% from the previous close of ¥6,540.

The stock opened at ¥5,887 and traded in a range of ¥5,678–¥5,953 during the session. Despite Monday’s sharp decline, SoftBank remains above its 52-week low of ¥3,365, while its 52-week high stands at ¥9,074.

Concerns over a possible delay to OpenAI’s initial public offering have added to the pressure, while investors are also watching intensifying competition in the AI industry and a series of security breaches and other unauthorised activities involving AI systems.

The latest selloff highlights the growing sensitivity of SoftBank’s valuation to the outlook for AI spending, OpenAI’s future valuation and the ability of its large-scale investments to generate returns.

(With inputs from wires agencies)

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