SoftBank shares tumble on reports of possible delay to OpenAI IPO

SoftBank Group shares fell sharply on Friday following reports that OpenAI may postpone its highly anticipated initial public offering (IPO), fuelling concerns that the Japanese technology investor could have to wait longer to realise returns from one of its largest investments.

The company's stock declined around 13 per cent on the Tokyo Stock Exchange, marking its steepest intraday fall in more than three months as investors reassessed expectations surrounding OpenAI's public listing.

According to multiple reports, advisers to the ChatGPT developer have warned that continued volatility in technology stocks could weaken demand for a new listing, potentially delaying the IPO until next year.

SoftBank is expected to hold an investment worth about $65 billion in OpenAI by October, making the AI company one of the conglomerate's most valuable assets.

Expectations that OpenAI would list in the near term had helped drive a strong rally in SoftBank shares in recent months, lifting the group's market capitalisation above that of Toyota Motor Corp.

Analysts view an OpenAI IPO as a major catalyst for SoftBank because it would establish a transparent market valuation for one of its biggest holdings and provide investors with greater clarity on the value of its broader portfolio of privately held technology companies.

Market participants also believe a public listing could help narrow the longstanding discount at which SoftBank's shares have traded by reducing uncertainty over the worth of its investment portfolio.

OpenAI, led by chief executive Sam Altman, recently submitted confidential paperwork to the US Securities and Exchange Commission as part of the IPO process.

The company is reportedly working with Goldman Sachs and Morgan Stanley on preparations for a stock market debut, although the timeline for the offering remains uncertain.

With IANS inputs