Masayoshi Son Bets on OpenAI but Gets Hit Hard! SoftBank Shares Plunge, Google Soars 6% to New High

SoftBank Group, led by Masayoshi Son, saw its stock price plunge more than 10% over two consecutive trading days, dropping to a two-and-a-half-month low and tumbling 33% over the past month. In contrast, Google’s stock surged over 6%, hitting new record highs. SoftBank is one of OpenAI’s main investors, and Son had previously announced an “All-in OpenAI” strategy. Now, however, the company faces the formidable challenge of Google AI catching up fast.

Masayoshi Son’s Big Bet on OpenAI Faces Setback

(Source: Google Finance)

SoftBank Group’s stock has tumbled for two straight days, with its market cap shrinking more than 40% from its peak of 40 trillion yen—meaning more than 16 trillion yen (about $102 billion) in value wiped out in just a month. This disastrous decline has taken a direct toll on Masayoshi Son’s personal wealth. As founder and largest shareholder, Son owns about 34% of SoftBank, and this downturn has reduced his net worth by several billion dollars.

Mitsubishi UFJ eSmart Securities market analyst Tsutomu Yamada commented, “With the positive reception of Google AI, people are worried OpenAI’s competitive environment will become much harsher, which has impacted its stock price.” This analysis highlights the core issue: SoftBank’s stock is closely tied to the value of OpenAI, and when the market becomes skeptical of OpenAI’s prospects, SoftBank, as a major investor, takes the first hit.

Masayoshi Son’s bet on OpenAI can be described as aggressive. He publicly stated that SoftBank would go “all-in” on OpenAI, integrating its technology across SoftBank’s subsidiaries and investing in multiple collaborations, including Stargate. This highly concentrated investment strategy is especially vulnerable as competition in the AI sector heats up. When Google introduces a competitive AI model, the market immediately re-examines OpenAI’s dominance and questions whether its valuation is justified.

While OpenAI stock is not publicly traded, its private market valuation has reached $157 billion, making it the world’s third most valuable private company. However, this valuation is based on the assumption that OpenAI can maintain its technological lead. Should competitors demonstrate equal or superior capabilities, the rationale supporting OpenAI’s stock price will be seriously challenged.

Google AI Models Show Overwhelming Advantages

Google recently unveiled a new generation of large language models that significantly outperformed previous generations on several key AI benchmarks, such as science, mathematics, visual understanding, and long-horizon planning. In addition to Vibe Coding, Google AI is now the leading agentic model, meaning the AI can proactively complete tasks for users. This progress poses a direct threat to OpenAI.

Google AI’s technological breakthroughs are evident across multiple dimensions. In scientific reasoning, Google AI can understand and solve complex problems in physics, chemistry, and biology, achieving accuracy rates over GPT-4o by 15 percentage points. In mathematics, Google AI solves 92% of high-level competition problems compared to GPT-4o’s 76%. Its visual understanding has also improved significantly, accurately identifying subtle differences and complex scenes—crucial for multimodal AI applications.

The most disruptive advance is in agentic capabilities. Agentic AI refers to AI that can autonomously plan and execute multi-step tasks. Traditional AI can only answer questions or generate content, but agentic AI understands user intent, autonomously breaks down tasks, and leverages multiple tools to accomplish complex goals. Google AI’s performance in this area makes it a true “digital assistant,” not just a “chatbot.”

With its massive user base, Google has shown that its search function is not being replaced by AI; rather, its rollout of Google AI is quickly catching up. GOOG stock has performed spectacularly, repeatedly hitting all-time highs and rising 66% year-to-date. This strong performance stands in sharp contrast to SoftBank’s plunge, highlighting the market’s dramatically different assessments of the two companies’ AI strategies.

OpenAI Stock and Valuation Face Reassessment Pressure

Though OpenAI’s stock is not publicly traded, changes in private market valuation still impact the paper value of investors like SoftBank. Before Google’s latest AI model launch, OpenAI enjoyed a premium valuation in the private market thanks to ChatGPT’s massive success and GPT-4’s technological lead. Investors were willing to pay top dollar for OpenAI shares, believing its technological moat was unassailable.

However, the emergence of Google AI has shattered this belief. When competitors demonstrate equal or superior technology, OpenAI’s valuation logic must be reassessed. The private market trading price of OpenAI shares may come under downward pressure, directly affecting the asset value of investors like SoftBank. Market analysts estimate that if OpenAI’s valuation drops 20–30% from the current $157 billion, SoftBank’s paper losses could reach billions of dollars.

Even more concerning for investors is the long-term competitive landscape. Google owns massive distribution channels such as the Android ecosystem, YouTube, and Chrome browser, allowing it to rapidly bring Google AI to billions of users. In contrast, OpenAI mainly relies on the ChatGPT website and API services. While its user base is large, its distribution power is limited. If Google fully integrates Google AI across its product line, OpenAI could lose its user growth momentum.

Three Major Challenges Facing OpenAI

Shrinking Technological Lead: Google AI has surpassed GPT-4o on multiple benchmarks, breaking the myth of OpenAI’s technological supremacy.

Distribution Channel Disadvantage: Google owns massive ecosystems such as Search, Android, and YouTube, while OpenAI lacks comparable distribution capabilities.

Commercialization Pressure: OpenAI’s annual revenue is around $2 billion. Relative to its $157 billion valuation, its price-to-sales ratio is 78x, creating immense profitability pressure.

Masayoshi Son’s AI Strategy Needs Rethinking

Masayoshi Son is known for his bold investment style, having invested $20 million in Alibaba’s early days and ultimately earning over $100 billion in returns. This success may have made him overly optimistic about his bet on OpenAI. However, the competitive dynamics in AI are completely different from the e-commerce era—technological moats are harder to maintain, and competitors have far greater resources.

SoftBank’s exact investment in OpenAI has not been fully disclosed, but reports suggest it participated in multiple rounds of financing, holding an estimated 5–10% stake. Based on OpenAI’s $157 billion valuation, SoftBank’s investment is worth $7.8–15.7 billion. If this asset depreciates by 30% due to intensifying competition, SoftBank could face $2.3–4.7 billion in paper losses.

Son once declared his ambition to build an ASI (Artificial Superintelligence) hub and make SoftBank a core player in the AI era. This vision depends on OpenAI maintaining its technological lead. The emergence of Google AI shows that AI competition is far fiercer than expected, and the risks of a single-bet strategy are becoming apparent. SoftBank may need to reassess its AI investment portfolio, consider diversifying across multiple AI firms, or increase investment in in-house AI R&D.

Market Doubts About SoftBank’s Future

SoftBank’s share price crash not only reflects concerns about OpenAI’s prospects but also exposes doubts about Masayoshi Son’s investment acumen. The SoftBank Vision Fund was once the world’s largest tech investment fund, but several of its marquee investments have underperformed—including WeWork’s bankruptcy restructuring, Uber’s continued losses, and shrinking valuations in multiple tech companies.

OpenAI stock was once regarded as one of the most promising assets in SoftBank’s portfolio. If this investment also faces challenges, SoftBank’s overall investment returns will deteriorate further. Investors are beginning to question whether Son’s investment strategy is too aggressive and whether SoftBank can continue to create value in the rapidly changing technology sector.