SoftBank, the Tokyo-based tech investing giant, saw its stock fall another 10.8% in trading today, as the Nasdaq's historic selloff whipped back around to Japan.

In all, SoftBank shares are down 59% since early June. They've returned to levels reached in April-a particularly choppy ride for one of the world's largest investors in AI outside of the hyperscalers.

Why the plunge? One answer is debt.

To pay for its monster investments in AI - particularly its $64 billion investment in OpenAI-SoftBank has been loading up on loans and bonds. In just 12 months through June 30, SoftBank piled on an additional $40.4 billion in debt, as it took advantage of the surging value of its holdings (particularly chip company Arm and OpenAI).

At the time, SoftBank boasted about its low leverage; its total debt was only 13% of the value of all its holdings, by its own metrics.

But now that its holdings are falling in value amid a market rout-Arm's stock has plunged 51% since June 30-the debt has stayed the same.

Credit-default swaps on SoftBank debt-an indicator of investors' fear of a default-surged in recent weeks as the AI market frenzy lost steam, and SoftBank's bonds have fallen in value. Even before the latest drop, investors demanded a hefty 9.75% interest rate on a slug of new bonds SoftBank issued in September.

It would likely take a bigger drop in the AI market to make for real trouble at SoftBank. Ratings agencies in September estimated the company had a sizable cushion before a downgrade.

For SoftBank to breach its own self-imposed limit of a 25% debt level, the value of all of its assets would have to drop by around 50% from June 30, its last public report. Its second-largest asset, shares in OpenAI, doesn't trade on public markets, so its valuation is less prone to wild swings, as are other assets like its Japanese telecom company.