A day after SoftBank CEO Masayoshi Son described his company as an undervalued goose laying golden eggs, a crack appeared in one of the Japanese investment group's prized investments.
Shares of SoftBank (JP:9984) slid nearly 13% on Friday after The New York Times reported that OpenAI - in which the Japan group holds a 13% stake - could delay its initial public offering until next year. A slumping Asian tech sector was also reacting to news that Apple (AAPL) had raised prices of some MacBooks and iPads due to rising component costs from the artificial intelligence boom.
Apple shares dropped 6% and Microsoft (MSFT) and Alphabet (GOOGL) shares also slumped, as the tech giant's price hikes overshadowed blowout results from memory-chip maker Micron (MU). The Nasdaq Composite COMP logged its fourth day of losses, with futures (NQ00) implying a fifth down-session ahead for Friday.
Citing three sources, The New York Times reported that OpenAI advisers are urging CEO Sam Altman to a delay that IPO, following poor after-market trading for SpaceX shares (SPCX) post its blockbuster IPO. Recent volatility in tech stocks, with concerns about AI valuations resurfacing, has also been unhelpful.
The report said CEO Sam Altman won't consider anything less than a $1 trillion valuation for the startup, but his advisers worry retail investors may now have less of an appetite for the ChatGPT maker.
Earlier this month, OpenAI said it filed a confidential version of its draft initial-public-offering paperwork with the U.S. Securities and Exchange Commission. With potential questions surrounding OpenAI's IPO, investors may now also be wondering about the prospects for Anthropic, which announced earlier this month that it had confidentially filed for its own listing, just ahead of its rival.
MarketWatch has reached out to OpenAI for comment.
"The concern is not just about SoftBank's potential exit timeline; it is also about whether AI monetization is progressing quickly enough to support the valuations and capital commitments already embedded across the ecosystem," Patrick Munnelly, strategist at Tickmill Group, told clients in a note.
"The market is still willing to believe in AI as a secular theme, but it is becoming less forgiving of any signs that returns may be deferred," he said.
The backdrop for both flotations has been complicated recently by talk of a price war in the cost of AI tokens by which the AI companies charge for their services and products. In their latest funding rounds, Anthropic was valued in May at $965 billion, while OpenAI's latest valuation was $852 billion in March.
The tech-heavy Kospi index KR:180721 was down nearly 6% on Friday, with trading reportedly suspended due to volatility, the second time this week. Shares of memory-chip makers SK Hynix (KR:000660) fell more than 8% with Samsung Electronics (KR:005930) down 5%. Taiwan's TAIEX TW:Y9999 dropped 3.6%.