SoftBank stares at over $50 billion in weekly losses after stock drops 8% as investors sour on AI plays

Authors: Lee Ying Shan

Publisher:

CNBC

Published: 11/7/2025

Language:English

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Elon

Good morning Norris, I'm Elon. Welcome to Goose Pod for Thursday, November 13th.

Morgan Freedman

And I'm Morgan Freedman. Today's topic: SoftBank's fifty-billion-dollar weekly loss amid a chilling slide in AI stocks.

Elon

An 8% drop on Friday, the worst week since March 2020. This isn't just a dip; it's a bloodbath. Fifty billion dollars in market cap, gone. Investors are spooked, treating SoftBank like a proxy for OpenAI, and when the market sneezes, SoftBank catches a hurricane.

Morgan Freedman

It is a fascinating turn of events. For a long time, the mere mention of AI was like a magic word for investors. Now, it seems a dose of reality is setting in. People are beginning to question if these sky-high valuations are built on solid ground or wishful thinking.

Elon

Exactly. It's a classic risk-reward scenario. They made that bold $5.4 billion move on ABB's robotics unit, trying to dominate 'physical AI'. You have to make big bets to win big, but when the market sours, those big bets become massive liabilities. The entire sector is getting hit.

Morgan Freedman

And so, the tide recedes, revealing who has been swimming without a suit. It's not just SoftBank. We see ripples across the board, from Arm Holdings to other major chipmakers. A correction, some might call it. A necessary one, perhaps.

Morgan Freedman

To understand this moment, one must look back at the SoftBank Vision Fund's journey. It began in 2017, a colossal one-hundred-billion-dollar vessel intended to sail the seas of artificial intelligence, funding the future. It was a grand and ambitious plan from the very start.

Elon

Grand is one word for it. Insane is another. They threw money at everything from WeWork to Uber. I mean, they had a huge stake in Nvidia and sold it before the massive boom! A three-billion-dollar return sounds great, until you realize what they missed out on.

Morgan Freedman

Indeed, the path has been anything but smooth. There were record profits, fueled by successes like Coupang, followed by record losses, sometimes reaching tens of billions in a single year. It is a story of dramatic highs and devastating lows, a true market saga.

Elon

And now they're pivoting again, trying to become a pure-play AI powerhouse. They're making massive bets, like the potential $25 billion into OpenAI and the Stargate project. They see the future, but the market is questioning if they can actually execute without getting burned again.

Morgan Freedman

This history of volatility is precisely why the current situation is so precarious. Every move SoftBank makes is magnified by its past. Investors remember both the spectacular wins and the very public, very costly failures. It creates a powerful narrative of uncertainty.

Elon

This all boils down to one question: Are we in a rational investment cycle or an irrational bubble? Look at OpenAI reaching a $500 billion valuation. The numbers are astronomical, though some say it's now valued on tangible traction, not just promises. But the valuation is still insane.

Morgan Freedman

Excitement is a powerful force. The tension is palpable. Investors want the explosive growth of AI but fear the dot-com style collapse if it doesn't materialize fast enough. It is a tightrope walk between ambition and fear, played out on a global stage.

Elon

And the OpenAI structure mess doesn't help. Abandoning the for-profit conversion! How do you promise investor returns with a conflicted structure? That makes raising the next thirty billion a very interesting negotiation, to say the least. It’s a huge gamble.

Morgan Freedman

It is the race to innovate versus the need for stability. One side sees this as 'industrializing intelligence.' The other sees a house of cards. The truth, as it often does, is likely being forged somewhere in the turbulent space between those two extremes.

Morgan Freedman

When a stone as large as SoftBank is dropped, the ripples travel far. We are seeing this across the semiconductor industry. Companies like Nvidia and SK Hynix feel the chill, and the sentiment spreads globally, denting confidence in even the biggest of tech names.

Elon

It's a confidence crisis. Investors were all-in on tech. Now, a few nervous comments and it's pure profit-taking. People are running for the exits before the fire is even confirmed. It shows how quickly sentiment can turn when valuations are stretched this thin.

Morgan Freedman

And this has real consequences for Japanese tech and the global supply chain. This 'valuation fatigue,' as one analyst called it, could slow the very innovation everyone is betting on. It’s a delicate balance between fueling progress and preventing a market collapse.

Elon

But SoftBank is doubling down. Laying off staff to focus purely on AI, still pushing that massive data center plan. They see this as a temporary storm, not a fundamental climate change in the industry. It's a high-stakes bet on the future.

Morgan Freedman

The question is, what if the bubble bursts? If funding evaporates, it jeopardizes not just profits, but progress itself. The future of AI depends on navigating this perilous financial landscape, and the stakes could not be higher for everyone.

Elon

That's the end of today's discussion. Thank you for listening to Goose Pod.

Morgan Freedman

We will see you tomorrow, Norris.

SoftBank faces over $50 billion in weekly losses as investor sentiment sours on AI stocks. High valuations are questioned, and past volatile investments like WeWork and Uber are recalled. Despite a pivot to AI, massive bets on OpenAI and data centers, coupled with market volatility, create significant uncertainty.

Read original at CNBC →

The logo of SoftBank is displayed at a company shop in Tokyo, Japan January 28, 2025. Issei Kato | ReutersShares of Japan's SoftBank Group resumed their slide on Friday, following a broader slump in AI-related stocks as investors once again grew wary of the sector's lofty valuations.The group, which holds a wide range of AI investments across infrastructure, semiconductor, and application companies, saw shares drop more than 8%.

This comes after SoftBank gained nearly 3% in the previous session, having plunged 10% on Wednesday to clock its worst day since April. It stares at about $53 billion market cap wipeout this week and its worst weekly loss since March 2020, if Friday's losses hold."SoftBank Group's shares are falling as many bought it as the only listed proxy for OpenAI," said David Gibson, senior research analyst at financial services firm MST Financial.

The pullback reflects growing caution around the AI sector and a realization that many of OpenAI's partnerships are still potential rather than confirmed, with funding prospects uncertain, he told CNBC.OpenAI CEO Sam Altman reportedly said the company has spoken with the U.S. government about potential federal loan guarantees to encourage chip factory construction.

His comments came after OpenAI's CFO suggested the firm hoped for federal help in securing chip financing.Stock chart iconShares of SoftBank Group fall following renewed pressure on AI-linked stocksSoftBank holds a controlling stake in U.K.-based semiconductor designer Arm Holdings, whose chips help power mobile and AI processors globally.

Shares of Nasdaq-listed Arm slid 1.21% overnight.Separately, Bloomberg recently reported citing people familiar with the matter that the group considered acquiring U.S. chipmaker Marvell Technology Inc. earlier this year.Broader declineOther Japanese tech stocks also declined. Semiconductor testing equipment maker Advantest dropped over 6%, chipmaker Renesas Electronics fell nearly 4%, Tokyo Electron, a chip production equipment maker, declined 1.

46%.Shares of the world's largest chipmaker, TSMC, fell 0.6%.Nvidia-supplier SK Hynix was down over 1% and South Korean peer and memory chipmaker Samsung fell 0.5%.The declines in Asian tech stocks also come after AI-related companies in the U.S. fell overnightQualcomm dropped almost 4%, despite strong quarterly results, after warning it could lose future Apple business.

AMD, a strong performer Wednesday, slipped 7%, while Palantir and Oracle were down about 7% and 3%, respectively. Nvidia and Meta Platforms also finished lower.The excitement surrounding AI has raised worries that markets might be experiencing a tech bubble. Some experts argue that the valuations of AI companies are starting to resemble the dot-com bubble of the late 1990s, with stock prices rising well beyond realistic profit forecasts.

The economic impact of artificial intelligence is undeniable and market bumps are inevitable, said Laura Cooper, global investment strategist at Nuveen."Still, it's too soon to call a bubble. Today's AI capex is being funded largely by cash-rich firms with solid balance sheets, not cheap credit or speculation," she said.

"The greater risk isn't a bubble bursting, but valuation fatigue — investors tiring of paying ever-richer premiums for AI returns that don't materialize quickly enough."