SoftBank Group's market value has halved from its peak in June as concerns mount over debts related to the company's investments in artificial intelligence.
According to Bloomberg, the company's shares fell 6.9% in Tokyo on Thursday (October 22), closing at ¥4,305. This is half of its record closing price of ¥8,632 on June 2. Masayoshi Son's company is now valued at approximately ¥24.7 trillion ($157 billion).
This decline in value has pushed SoftBank behind companies like Hitachi and Recruit Holdings in Japan in terms of market capitalization. This comes after SoftBank had iefly surpassed Toyota in June to become Japan's most valuable company.
This development is significant beyond Tokyo because SoftBank is the largest external backer of OpenAI. A large portion of this investment was made with borrowed money, and with interest rates rising, the cost of this debt is increasing.
The rising cost of borrowing has increased financial pressure on SoftBank, making investors worried about the company's ability to manage its heavy debt load amid a volatile market.
This situation highlights the risks associated with SoftBank's aggressive investment strategy in the technology sector, particularly in the field of artificial intelligence.
Source: Bloomberg
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