SoftBank Swings Between State-Backed AI Ambitions and a 32% Monthly Stock Rout

Investors are voting against SoftBank's grand AI vision with their feet, sending the stock down nearly a third in the past month, even as Tokyo pumps hundreds of billions of yen into the very technologies Masayoshi Son is betting on. The contradiction captures a group caught between a generous government-sponsored growth strategy and rising market fears that the whole sector has overextended.

The most immediate cash injection comes from Japan’s state-backed New Energy and Industrial Technology Development Organization (NEDO). It is transferring roughly 387 billion yen (about $2.6 billion) in the fiscal year ending March 2026 to Noetra, a joint venture led by SoftBank that also includes Sony, Honda and three of the country’s largest banks. The consortium’s mission: develop models for “physical AI” — the fusion of artificial intelligence with robotics. Official research kicks off in July, and the project is part of a wider government push to funnel up to 1 trillion yen into the technology over five years.

Son, meanwhile, shows no sign of dialing back his ambitions. He dismisses warnings of an AI bubble as an insult to the technology’s potential, comparing the current moment to the early internet days. His own track record provides ammunition: a $2 billion stake in Intel built in August 2025 is already in the black. The larger bet remains Stargate, the AI-infrastructure initiative for which SoftBank committed $19 billion in early 2025. Son’s long-term target is staggering — he wants the group’s net asset value to hit 1 quadrillion yen (roughly $6.4 trillion) within 16 years.

On the ground, the portfolio is being reshuffled to support that vision. The hotel platform OYO is pressing ahead with an IPO; parent company Prism filed an updated prospectus, and SoftBank intends to keep its roughly 40% stake intact. At the LY Corporation, a governance committee has been set up to manage SoftBank’s outsized influence and avoid conflicts of interest, with a board now majority-independent.

Should investors sell immediately? Or is it worth buying SoftBank?

Yet the single biggest driver of the group’s fortunes remains Arm. The chip designer accounts for 47.8% of SoftBank’s total net asset value of around 40 trillion yen, making the parent’s financials highly sensitive to Arm’s stock price. Arm’s CEO Rene Haas, who also sits on SoftBank’s board, earned roughly 6.1 billion yen in the year to March 2026 — the highest pay package among Japanese-listed company executives.

Son is also looking further afield for growth. He criticized Elon Musk’s idea of putting data centers in orbit, calling it a “lost bet” because semiconductors, not energy, are the real cost driver, and launch-and-maintenance expenses would erase any savings. Instead, SoftBank is reportedly interested in buying a stake in Japanese utility TEPCO to secure power for its own data centers — a logical move given that global data-center energy demand is projected to rise from 415 TWh in 2024 to 945 TWh by 2030. And for 2026, the group plans to acquire ABB’s robotics business, another step toward integrating physical AI.

None of that is calming the market today. The Bank for International Settlements warned recently that AI-driven capital spending risks creating overcapacity and financial instability — a view that resonated with traders already rotating out of big tech. SoftBank shares lost 1.9% on the session, landing at €33.30. Over the past month the stock has cratered more than 32%, with annualized volatility hitting 114% and the relative strength index settling at 42.9, pointing to a mildly bearish momentum.

SoftBank at a turning point? This analysis reveals what investors need to know now.

For all the state support and Son’s long-term narrative, the debt-funded expansion into new data centers and robotics needs to start throwing off tangible earnings soon. Without that, the selling pressure is likely to intensify — 387 billion yen in subsidies can only cushion so much.

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