SoftBank sold its entire stake in Nvidia, raising US$5.83 billion to finance new investments in artificial intelligence, at a time when investors question the volume of capital directed to a technology with an uncertain return.
The sale highlights founder Masayoshi Son’s need to raise funds for a range of projects, ranging from Stargate data centers to AI robot factories in the United States. The departure comes amid debate over whether spending by big techs — from Meta to Alphabet — expected to exceed US$1 trillion in the coming years, will bring commensurate returns.
SoftBank wants to establish itself as a protagonist in this expanding ecosystem, relying on stakes in companies such as OpenAI and American chipmaker Ampere Computing. On Tuesday (11), company executives avoided answering whether the sector is experiencing an investment bubble in AI and stated that the sale was not related to Nvidia, but was a necessary financing measure.
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“I can’t say whether we’re in an AI bubble or not,” Chief Financial Officer Yoshimitsu Goto said on the earnings call. “We sold Nvidia to use the capital for our financing,” he said, without giving further details.
SoftBank had already sold its stake in Nvidia in 2019 — three years before the launch of ChatGPT drove historic share appreciation. It is not clear when the group repurchased the shares, but its last disclosure indicated a stake of around US$3 billion at the end of March. Since then, Nvidia has gained more than $2 trillion in market value.
This appreciation, added to the investment in OpenAI, reinforced the Japanese company’s results. SoftBank reported net profit of ¥2.5 trillion ($16.2 billion) in the fiscal second quarter, well above analysts’ average estimate of ¥418.2 billion. According to Goto, OpenAI’s value has risen by US$14.6 billion since SoftBank’s entry.
The company is expected to record its highest annual profit since 2020, according to analyst Kirk Boodry, from Bloomberg Intelligence. “The sale of Nvidia shares for $5.8 billion shows SoftBank’s liquidity while maintaining focus on its AI investment program,” he said.
Son’s initiatives — which include the launch of the Stargate data center and the construction of a $1 trillion AI manufacturing hub in Arizona — have involved meetings with US President Donald Trump and executives from TSMC and South Korean conglomerates. SoftBank even evaluated the purchase of American Marvell Technology at the beginning of the year.
Today, the group holds stakes in some of the most coveted companies in the sector, such as OpenAI, ByteDance and Perplexity AI. These assets boosted accounting earnings and helped SoftBank shares rise 78% in the three months ending in September — the best quarterly performance since 2005.
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The company also announced a 4-to-1 stock split, effective January 1, a move aimed at expanding access for Japanese retail investors.
The challenge now is to balance the financing of several operations already signed and new projects that Son may begin in the coming months.
Through Vision Fund 2, SoftBank will fully invest the $22.5 billion pledged to OpenAI in December, eliminating prior conditions. The group also plans to buy Ampere Computing for US$6.5 billion and acquired ABB’s robotics division for US$5.4 billion.
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The company increased Arm Holdings’ share-backed loan from $13.5 billion to $20 billion, keeping $11.5 billion available. It also obtained a US$8.5 billion bridge loan to finance the investment in OpenAI and another for the acquisition of Ampere.
“It was simple: buying SoftBank was a cheap way to have exposure to Arm and a broad portfolio of AI and technology. This thesis was confirmed — the shares more than doubled, far exceeding the slight increase in equity value”, says a Finimize Research report published on Smartkarma before the results were released.
“But now the discount has practically disappeared, so SoftBank is no longer a ‘cheap’ way to enter the sector. In this sense, it could be a good time to sell and make profits”, concludes the text.
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