This article first appeared on GuruFocus.
SoftBank Group Corp. (SOBKY) has become the fault line of the global AI selloff, and the tremor is hitting harder than investors expected. Traders are treating the Japanese conglomerate as a high-beta proxy for privately held OpenAI, especially after Alphabet’s Gemini 3.0 debut fueled fresh doubts about whether OpenAI’s momentum could be tested. The result has been a punishing slide: SoftBank’s stock has fallen around 40% since late October, vaporizing more than 16 trillion in value, even though its early ride on the AI boom delivered a 14.6 billion gain on its OpenAI stake and an unexpected 2.5 trillion net income in the fiscal second quarter. CFO Yoshimitsu Goto summed up the current unease by saying it’s impossible to know whether AI valuations represent a bubble until much later, a comment that possibly reflects how fast sentiment has turned.
This week briefly broke the gloom when SoftBank shares jumped as much as 8% after the company completed its $6.5 billion takeover of Ampere Computing, the US chip designer whose server processors sit squarely in the Arm ecosystem. But even that lift comes against the backdrop of heavy obligations: a $22.5 billion December payment still due to OpenAI part of its $32 billion commitment and the need to finance a proposed $5.4 billion purchase of ABB’s robotics unit. Bloomberg Intelligence analysts say the stock’s trajectory has become more tightly linked to OpenAI’s prospects than to broader AI-market dynamics, noting SoftBank shares have fallen 24% since Google rolled out Gemini 3.0. If the December investment proceeds and OpenAI’s valuation reaches $500 billion, SoftBank’s stake could represent just over 20% of its net asset value, a dynamic that powered the stock higher through the summer before reversing sharply.
Founder Masayoshi Son remains determined to position SoftBank as a core pillar of an OpenAI-centric future, even as the competitive landscape shifts underfoot. He has unloaded stakes in Nvidia (NASDAQ:NVDA) and Oracle (NYSE:ORCL) to build firepower for AI investments, raised exposure to chip designers, and tightened SoftBank’s grip on Arm, now owning nearly 90% of the company. But that strategy may draw scrutiny as tech giants build their own AI chips and as RISC-V the open-source architecture gaining traction in China begins to reshape design roadmaps. The ripple effects are already moving through Japan’s market: Ibiden shares have dropped about 4% this week on concerns linked to Meta’s plan to use Google’s Gemini AI chip, while Toppan Holdings is up roughly 11% on expectations tied to its work with Broadcom. As Nissay Asset Management’s analysts suggest, companies like Advantest may also benefit, because the era of indiscriminate AI-stock buying appears to be ending, giving way to a more selective phase where competitive positioning could matter more than hype.
