SoftBank leads decline in Japanese tech stocks as worries over AI spending spill over to Asia

On Thursday, Japanese technology stocks experienced a significant decline as fears surrounding AI infrastructure investments in the United States reverberated across Asian markets. SoftBank Group Corp emerged as one of the hardest-hit companies, witnessing a steep drop of up to 7.25%. This contributed to the Nikkei 225 index's overall decrease of 1.23%, marking it as a leading indicator of losses in the region. The downturn comes on the heels of a 1.81% plunge in the tech-heavy Nasdaq Composite, which faced setbacks primarily due to poor performance from major players like Oracle, Broadcom, and Nvidia. Oracle's decline was exacerbated by reports from the Financial Times indicating that Blue Owl Capital's financial support for a $10 billion data center project in Michigan had encountered delays. Recently, Oracle had dismissed claims suggesting that it would postpone certain projects for AI leader OpenAI until 2028. SoftBank has experienced significant stock volatility over the past month, driven by growing concerns about investment in AI initiatives. Earlier this year, the company had announced ambitious plans to allocate $500 billion toward AI infrastructure in the U.S., teaming up with OpenAI, Oracle, and other partners. In September, it unveiled five new AI data center locations under its Stargate initiative, which aims to bolster OpenAI's infrastructure. Other Japanese tech companies also faced declines; semiconductor equipment manufacturer Advantest saw its shares drop by as much as 5%. Similarly, companies like Lasertec, Renesas Electronics, and Tokyo Electron recorded losses ranging from 3% to 4%. Jesper Koll, the director of financial services firm Monex Group based in Tokyo, noted that a significant portion of the components necessary for data and power centers, as well as AI hardware, are uniquely produced in Japan. This reliance makes Japanese tech stocks particularly susceptible to fluctuations in U.S. technology spending. In contrast, South Korea's chip giant Samsung Electronics experienced a milder decline of 0.93%, while SK Hynix managed to recover slightly with a gain of 0.73%. Taiwan Semiconductor Manufacturing Company (TSMC), the largest contract chip manufacturer worldwide, remained relatively stable with only a minor decrease in stock value.