Shares in Japan's SoftBank Group closed 10% lower on Wednesday, amid a broader drop in AI-linked companies as investors turned wary of stretched valuations in the market's most crowded trade.

SoftBank, which has built a broad portfolio of AI-related investments spanning infrastructure, chips, and application firms, lost about $23 billion in market cap . The group's shares clocked their worst day since April when shares plunged over 12%, data from LSEG showed.

SoftBank has a controlling stake in U.K-based Arm Holdings, whose chip designs power mobile and AI processors, and acquired Ampere Computing this year to strengthen its AI data-center capabilities. Nasdaq-listed Arm Holdings saw shares drop 4.71% overnight.

The group has backed leading AI model developers such as OpenAI , as

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