SoftBank Market Value Halves Amid AI Investment Risks
SoftBank Group shares fell 6.9% Thursday as its market value dropped 50% from June highs due to AI investment concerns and high leverage.
The market value of SoftBank Group has fallen 50% from its all-time high reached on June 2, with shares dropping 6.9% on Thursday. The company's market capitalization now stands at approximately ¥24.7 trillion ($157 billion), placing it behind Hitachi and Recruit.
Investors are concerned about the sustainability of the company's massive artificial intelligence investments, which are compounded by rising borrowing costs and a highly leveraged financial structure. To fund the AI ambitions of founder Masayoshi Son, the company executed the largest corporate junk bond sale on record in September, raising $11.1 billion.
Market confidence declined further as bonds from U.S. cloud-computing provider CoreWeave fell to distress levels, signaling broader financing risks across the AI sector. Additionally, SoftBank faces headwinds regarding its nearly $65 billion investment in OpenAI, as Chinese rivals introduce more affordable AI models.
