SoftBank’s dramatic 40 percent stock plunge, which erased nearly 50 billion dollars in market value, has intensified global concerns over overstretched AI valuations. The steep correction came at a moment when investor confidence was already wavering, and was further aggravated by Palantir’s stock decline—an event that led analysts to question whether sky-high revenue multiples in the AI sector are still defensible. Ben Inker of GMO sharply captured the mood, warning of “frantic venture capitalists throwing money at AI startups at multi billion dollar valuations without even being told their plans,” a reflection of the speculative excess overshadowing the industry.
Market unease deepened when SoftBank revealed that it had exited its entire NVIDIA stake in order to increase exposure to OpenAI-related opportunities. The move triggered widespread debate among analysts. Michael Ashley Schulman argued that the shift “turns a category leader into a messy high beta roulette wheel,” underscoring fears that SoftBank may be pivoting too aggressively toward volatile AI bets.
At the same time, Google’s newly unveiled Gemini 3 model injected fresh competitive pressure into the landscape. Early reviews positioned Gemini 3 as a strong challenger to OpenAI’s dominance, prompting Mitsubishi UFJ’s Tsutomu Yamada to say that “the competition environment of OpenAI will become tougher.” The excitement around Gemini 3, combined with broader market jitters, contributed to a global tech sell-off that dragged down major players including NVIDIA, TSMC, and Alibaba.
The turbulence has revived long-standing concerns about SoftBank’s strategic patterns. Critics warn that the conglomerate may be repeating a cycle of “overconfidence and reinvention,” raising the question of whether its newest AI pivot signals transformative foresight or echoes past missteps such as WeWork. Analysts across global financial institutions are urging restraint even as they acknowledge the transformative potential of AI. Deutsche Bank’s Christian Nolting reaffirmed that “AI is a game changer” but emphasized the risks posed by overinvestment and looming power shortages that could hinder AI scalability. Vanguard, too, advised caution, noting that rapid growth in AI infrastructure does not automatically translate into sustained equity gains.
Overall, the episode has become a defining moment for global markets—one that highlights the delicate balance between AI’s extraordinary promise and the speculative valuation risks now coming sharply into focus.
