Key Takeaways:
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• SoftBank shares are down ~40% since late October amid concerns that Alphabet’s Gemini 3.0 could erode OpenAI’s lead.
• Despite volatility, SoftBank still sits on a ¥2.5T quarterly profit driven by a $14.6B unrealized OpenAI gain.
• Heavy capital commitments — including a $22.5B upcoming OpenAI payment — amplify exposure to AI valuation swings.
• Market rotation signals a shift from broad AI buying toward selective winners in chips and supply chain hardware.
What Happened?
SoftBank Group has lost nearly 40% of its market value in under a month as investors reassess risks tied to its outsized exposure to OpenAI. The stock drop accelerated after Alphabet unveiled Gemini 3.0, sparking fears that rising competition could narrow OpenAI’s competitive advantage. SoftBank recently completed a $6.5B acquisition of Ampere Computing and is preparing a $22.5B December payment to OpenAI as part of its plan to scale participation across the AI value chain. Despite turbulence, SoftBank posted a ¥2.5T Q2 profit — buoyed by a $14.6B unrealized gain from its OpenAI stake.
Why It Matters?
SoftBank has become a high-beta proxy for OpenAI sentiment. Its deep financial commitment means valuation shifts in OpenAI — or competitive pressure from Google, Meta, and others entering AI chip design — directly impact its market perception. Analysts note SoftBank could hold over 20% of its net asset value in OpenAI if a $500B valuation materializes, magnifying both upside potential and downside volatility. At the same time, rising adoption of RISC-V and in-house chip efforts from global tech giants challenge the long-term dominance of Arm — an asset SoftBank owns nearly 90% of. The market is transitioning from indiscriminate AI buying to selective positioning based on supply-chain winners and chip architecture trajectories.
What’s Next?
The key watchpoints are OpenAI’s competitive position post-Gemini 3.0 and the sustainability of AI valuations as capital continues to flood hardware and compute infrastructure. Investors must track SoftBank’s December payment execution, its planned ABB robotics acquisition, and early performance of Ampere Computing in a rapidly shifting chip landscape. With AI investment entering a more selective phase, SoftBank’s ability to diversify risk while still capturing ecosystem upside will determine whether the recent selloff becomes a buying opportunity or a structural realignment.
