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Investing.com-- SoftBank Group shares tumbled in Tokyo trade on Tuesday, largely ducking a broader recovery in technology stocks as markets fretted over the conglomerate’s outsized bet on ChatGPT creator OpenAI.
SoftBank (TYO:9984) slid nearly 10% to close at a 2-½ month low of 15,390.0 yen, and was among the biggest weights on the Nikkei 225, which rose marginally. Softbank shares also lagged gains in broader Asian tech shares, which were aided by increasing bets on a December interest rate cut.
SoftBank shares have slumped nearly 32% in the two weeks since it disclosed it had sold off its entire stake in Nvidia (NASDAQ:NVDA) to fund its $40 billion investment in OpenAI. SoftBank had also disclosed a sale of its holdings in T-Mobile US Inc (NASDAQ:TMUS) for the same purpose, and said it was proceeding with its OpenAI investment even without the startup meeting certain key performance indicators.
SoftBank is trading down 44% from a late-October record high, as a broader slump in tech valuations also weighed.
Concerns over SoftBank’s exposure to OpenAI grew in recent sessions, especially after Google (NASDAQ:GOOGL) released a new version of its flagship AI model, Gemini 3, which was seen outperforming comparable offerings from OpenAI and presenting increased competition for the startup.
SoftBank’s close relationship with OpenAI, who is also its partner in a $500 billion venture to build AI infrastructure in the U.S., became a point of concern amid growing questions over how the AI startup plans to meet its spending commitments.
OpenAI has committed to spend over $1 trillion in the next five years – a target that several analysts have questioned, given that the company is yet to generate a profit.
Questions over the start-up’s spending commitments were boosted by executive comments that appeared to be calling for government backing, while recent earnings from Nvidia, a major OpenAI supplier and investor, did little to quell concerns over stretched AI valuations and circular funding in the industry.
Adding to this rhetoric, investor Michael Burry, who famously called the 2008 subprime mortgage crisis, last week described OpenAI as a “linchpin” of a web of circular financing in the AI industry.