SoftBank Losses 99% in Dotcom Bust, Now Bets Big on AI

The SoftBank Group experienced a 99% loss in Dot-com and recently achieved an all-time high stock price and a market capitalization of $97.2 billion.

On Tuesday, July 2, SoftBank Group Corporation’s stock experienced a 1.5% increase, resulting in an all-time high.

The company’s shares experienced a significant decline in recent years, coinciding with the closure of numerous high-profile tech firms, such as WeWork, and the Chinese government’s crackdown on the tech sector. However, the company has since achieved a new high point.

According to analysts, the Japanese company’s recent increase has been primarily attributed to the performance of its computing subsidiary Arm Holdings and its pivot toward artificial intelligence.

Artificial intelligence enthusiasm

As reported by Cointelegraph, SoftBank’s chairman and founder, Masayoshi Son, recently declared that the company would increase its investment in artificial intelligence (AI) technologies.

At the annual company meeting in Tokyo, he informed the audience that the company would prioritize AI due to its significance to Softbank and his innate desire to develop “artificial superintelligence.”

After the comments were made, the company’s shares experienced a 3% decline; however, they rebounded to reach their all-time high.

Another bubble?

Analysts have expressed concern that the generative AI market may be another mirage on the brink of bursting. Products like Microsoft’s Co-Pilot and OpenAI’s ChatGPT have not yet found their ideal application among consumers.

Additionally, Nvidia has achieved its all-time high and has demonstrated explosive growth in the process, becoming the third company to accomplish this feat and the fastest to transition from a two trillion-dollar market valuation to three.

As a result, many have expressed that the market has no further direction than horizontal (or downward).

Although there is never a guarantee in finance or technology, much like predicting the weather, it is essential to recognize when the conditions are favorable for a negative pressure system.

In the case of SoftBank, the company’s all-in approach to joining the surge in companies concentrating their efforts on generative artificial intelligence has resulted in record-breaking dividends due to the sudden investor and shareholder interest.

However, approximately 24 years ago, SoftBank made a significant investment in dot-com startups, which resulted in a substantial increase in its stock prices to its previous record highs. Ultimately, the bubble exploded in March 2000, losing 99% of its value.

Even though Softbank was not the sole company to experience losses due to the dot-com bubble collapse, it has persevered to achieve new heights, in contrast to many of its contemporaries. However, it is essential to note that Softbank Group recovered decades later.