SoftBank shares halve from June highs, raising concerns about increased AI financing risks

As borrowing costs rise and concerns mount about the sustainability of large-scale artificial intelligence investments, SoftBank Group’s market value could fall to half of its peak in June this year. On Thursday, SoftBank’s share price once fell by 6.7%, down a total of 50% from the all-time high reached on June 2. The financial reports of major U.S. technology companies failed to ease investors’ concerns. Bonds of U.S. cloud computing provider CoreWeave Inc. have dropped to levels reflecting credit distress, exposing financing risks across the entire industry and further intensifying worries about global AI spending. Kazuyuki Muramatsu, head of investment management at Nagomi Capital, stated: “As investors increasingly scrutinize the financial health of AI-related companies, SoftBank’s vulnerabilities have become more prominent. This is because the group’s financial structure is highly leveraged, and borrowing costs continue to rise.” He noted that if the global market turns more pessimistic about AI growth prospects, the SoftBank Vision Fund might face valuation losses, which in turn would force SoftBank to pay higher premiums for future financing.