SoftBank Stock Drops 50% Amid Market Skepticism Over AI Investments

SoftBank's stock price dropped significantly, plunging nearly 50% from its June high amid growing market skepticism over its debt-fueled artificial intelligence investments. The decline was exacerbated by rising financing costs and broader industry jitters sparked by CoreWeave's financial distress. This downturn highlights growing financial anxieties surrounding the heavy, debt-driven funding models prevalent in the current AI boom. As major backers like SoftBank face soaring credit risks and rising interest rates, the sustainability of aggressive AI infrastructure spending is being called into question. SoftBank's credit default swap quotes rose to a four-year high, and the company recently issued $11.1 billion in junk bonds to fund its AI initiatives. Furthermore, SoftBank has invested nearly $650 billion (approximate yen equivalent) into OpenAI, which now faces intensifying competition from lower-priced rivals.