SoftBank Shares Plunge 50% From June Peak as AI Spending Fears Mount

SoftBank Group Corp. shares fell as much as 6.7% on Thursday, extending their decline from a June 2 record high to 50%, as rising borrowing costs and growing skepticism over AI investments erased confidence in the Tokyo-based conglomerate. The stock is down more than 30% this month, wiping out all September gains. Credit-default swaps insuring SoftBank's debt rose to a near four-year high on Tuesday. The selloff accelerated after CoreWeave Inc.'s bonds sank to distressed levels, exposing financing risks across the AI sector. SoftBank has invested nearly $65 billion in OpenAI, which now faces cheaper Chinese rivals offering comparable performance. The company raised $11.1 billion in September through the largest corporate junk bond sale on record to fund founder Masayoshi Son's AI ambitions. "SoftBank's vulnerability stands out as investors increasingly scrutinize the financial health of AI-related companies, given the group's highly leveraged financial structure and growing borrowing costs," said Kazuyuki Muramatsu, head of investment management at Nagomi Capital. He warned that a souring of AI sentiment could trigger Vision Fund valuation losses and raise future funding premiums.