SoftBank plunges 12% after doubts about OpenAI's IPO

SoftBank Group shares posted a sharp decline this Friday after reports indicated that OpenAI is considering delaying its initial public offering (IPO) to 2027. The move increased investor concerns about the timeline for realizing gains on one of the Japanese conglomerate's most significant investments in the artificial intelligence sector.

The company's shares fell about 13% during trading in Tokyo and ended the day down 12.53%. Selling pressure on the company also contributed to the negative performance of the Nikkei 225 index, which closed the session down करीब 4%.

According to information released recently, OpenAI's financial advisors presented two paths for the company. The first alternative would be to carry out the IPO as early as 2026, accepting a lower valuation. The second option would involve waiting until 2027 to seek a valuation that could reach US$ 1 trillion.

The reports also indicate that OpenAI CEO Sam Altman showed resistance to the possibility of reducing the desired valuation just to speed up the public listing process. The discussion is taking place at a time when the company seeks to balance expansion, fundraising, and market valuation.

At the beginning of this month, OpenAI confidentially submitted a draft registration statement to the United States Securities and Exchange Commission (SEC). Despite this, the company made it clear that it has not yet set a date to move forward with the stock market listing and that it could remain private for a longer period.

So far, OpenAI has not officially announced any change to its IPO timeline.

The market's concern is linked to SoftBank's strong exposure to the artificial intelligence company. In February, the Japanese group agreed to invest another US$ 30 billion in OpenAI. Upon completion of the transaction, the total amount committed by the company is expected to reach approximately US$ 64.6 billion.

SoftBank's estimated stake in OpenAI would reach about 13%, making the Japanese company one of the largest investors in the AI developer. As a consequence, changes in OpenAI's valuation outlook have a direct impact on the conglomerate's shareholders' expectations.

In May, SoftBank shares hit record highs driven by optimism surrounding artificial intelligence and expectations of a future OpenAI public offering. Although a possible postponement of the IPO would not change the group's equity stake, it could delay the definition of a public market value for the company and postpone opportunities to monetize the investment.

The drop in the shares came just two days after SoftBank founder Masayoshi Son defended the company's aggressive strategy in artificial intelligence and downplayed concerns related to a possible bubble in the sector.