SoftBank shares slide up to 13% as AI stocks fall on slowdown calls

SoftBank Group shares fell as much as 13% in Tokyo on Monday, their steepest drop since 17 July. AI-linked stocks sold off worldwide that day. Over the weekend, the heads of Anthropic and OpenAI had called on the industry to slow the development of more capable models.

The same day, Bloomberg reported that SoftBank had secured an $11.87bn loan to fund its OpenAI investment. The report cited people familiar with the matter. SoftBank declined to comment to Bloomberg, and TNW has not independently verified the report.

A bigger loan than planned

SoftBank signed the two-year facility last week, and about 20 banks made commitments, Janice Huang reported for Bloomberg. SoftBank had aimed to raise $10bn. It began seeking that second loan in August. A few weeks earlier, it had signed a $10bn margin loan backed by its OpenAI stake.

SoftBank is set to invest close to $65bn in OpenAI by October. Including the new facility, it has raised the equivalent of about $37bn from bonds and loans this year. That figure comes from data compiled by Bloomberg.

The borrowing continues. This week, SoftBank is meeting investors in New York about a dollar-denominated junk bond sale. It could raise $10bn to $20bn, according to Bloomberg. Earlier this year, the company also held a record retail bond sale in Japan.

SoftBank is also paying off the rest of its $40bn bridge loan on 15 September. The company said on 9 September that it would prepay the $25.9bn still outstanding. It had drawn $30bn of the facility, which it signed in March mainly to fund follow-on investments in OpenAI.

Chip stocks fell hardest

The selloff followed a Saturday essay by Anthropic chief executive Dario Amodei, who called for the pace of AI development to slow. Elon Musk and OpenAI’s Sam Altman said they agreed. Altman also said OpenAI would not go public this year, citing safety.

The Philadelphia semiconductor index fell more than 5% on Monday, Reuters reported. Nvidia lost 3%, while AMD and Micron each dropped 4% or more. The Nasdaq 100 fell 1.2% to a six-week low in early trading.

In Europe, the tech sector fell 2.2%, with ASML down 6%. In Asia, TSMC and SK Hynix also declined, Reuters reported.

Not every stock fell

Cybersecurity shares moved the other way. CrowdStrike and Zscaler were up 12% and Palo Alto Networks 11% by late morning in New York, 24/7 Wall St reported.

The AI warnings were also not the only pressure on markets. The 10-year US Treasury yield touched about 5%, its highest since October 2023, as oil prices rose, TheStreet reported. The Nasdaq Composite closed 0.56% lower.

Not everyone is convinced

Some investors dismissed the warnings. Michael Burry called them “hype and puffery” in a post on X, according to Reuters. He added that they were “cover for real uncontrollable slowing growth”.

Deutsche Bank questioned whether companies would pull back at all. In a note cited by Reuters, it said: “It’s difficult to imagine firms voluntarily stepping back while rivals continue to push ahead.”