Nvidia CEO Jensen Huang (left) and SoftBank Group CEO Masayoshi Son pose during an AI event in Tokyo on November 13, 2024.
Akio Kon | Bloomberg | getty images
SoftBank said on Tuesday it has sold its entire stake in the US chip maker NVIDIA For $5.83 billion as the Japanese giant looks to cash in on its “all in” bet on ChatGate maker OpenAI.
The firm said in its earnings statement that it sold 32.1 million Nvidia shares in October. It also revealed that it sold part of its T-Mobile stake for $9.17 billion.
“We want to provide a lot of investment opportunities for investors while we can still maintain financial strength,” SoftBank Chief Financial Officer Yoshimitsu Goto said during an investor presentation.
“So through those options and tools we make sure that we’re ready to fund funding in a very safe way,” he said in comments translated by the company. He said the stake sale was part of the firm’s strategy for “asset monetization”.
Nvidia shares fell 0.95% in premarket trade on Tuesday.
Stake sales and a huge $19 billion profit from SoftBank’s Vision Fund helped the company double its profit in the second quarter of the fiscal year.
While Nvidia’s exit may be a surprise to some investors, it is not the first time that SoftBank has pulled money out of the American AI chip darling.
SoftBank’s Vision Fund was an early backer of Nvidia, reportedly acquiring a $4 billion stake in 2017 before selling all of its holdings in January 2019. Despite its latest sale, SoftBank’s business interests remain largely aligned with Nvidia.
That Tokyo-based company is involved in several AI ventures that rely on Nvidia’s technology, including the $500 billion Stargate project for data centers in the US.
“In our view, this should not be seen as a cautious or negative stance on Nvidia, but rather SoftBank needs at least $30.5 billion of capital to invest in the October-December quarter, including $22.5 billion for OpenAI and $6.5 billion for Ampere,” Rolf Bulk, equity research analyst at New Street Research, told CNBC.
“This is more investment in one quarter than the combined investment of the last two years,” Bulk said.
Vision Fund posts $19 billion profit
The announcement comes after SoftBank reported a $19 billion profit on its Vision Fund in the second quarter of its fiscal year, helped by investments from OpenAI and electronic payments services firm PayPay.
The Vision Fund is aggressively pushing into artificial intelligence, investing and acquiring firms across the AI value chain, from chips to large language models and robotics.
“We were able to achieve these results because we first invested in OpenAI in September last year,” said SoftBank’s Goto. He said OpenAI’s latest valuation milestone of $500 billion is one of the largest valuations in the world in terms of fair value.
Shares in the Japanese conglomerate have fallen last week as concerns over an AI bubble have jittered global markets.
“Our stock price has been going up and down dynamically recently… We want to provide as many investment opportunities as possible,” Goto said Tuesday, adding that the company’s announced four-for-one stock split is part of its strategy to provide as many investment opportunities as possible for shareholders.
