SoftBank Shares Fall 50% From June Peak as AI Debt Concerns Grow

SoftBank’s shares have fallen about 50% from the record high reached June 2, leaving its market value near $157 billion as investors assess the financing costs of its large artificial intelligence investments.

Four months ago, SoftBank briefly overtook Toyota to become Japan’s most valuable company by market capitalization. The decline comes amid higher financing costs and concerns about whether large AI investments can be sustained. Financing risks have also drawn growing concern across the AI industry.

SoftBank relies heavily on debt to fund AI infrastructure. Credit-default swap (CDS) prices tied to the company rose to a near four-year high this week, adding to concerns about its financial position. An earlier SoftBank credit-swap spread reading reached 432 basis points, its highest level since 2022.