In brief
- SoftBank sold its entire 32.1 million-share Nvidia position for $5.83 billion in October, marking the second time the firm has exited the AI chipmaker.
- The asset sales are funding SoftBank’s investment in OpenAI, with $22.5 billion scheduled to close in December following an October agreement amendment.
- “As SoftBank’s investment in OpenAI was very large the company had to use its existing assets to finance new investments,” CFO Yoshimitsu Goto told reporters.
SoftBank Group sold all its shares in Nvidia in October, severing ties with the AI chipmaker that powered the sector’s historic rally. The Japanese conglomerate is redirecting capital toward OpenAI, even as the ChatGPT maker faces mounting losses and its CEO’s credibility comes under fire.
The Tokyo-based firm disclosed the complete exit from Nvidia in its financial filing Tuesday, revealing that it and an asset management subsidiary “sold all of Nvidia Corporation shares that they had owned, for $5.83 billion.”
The move came alongside a $9.17 billion partial sale of its T-Mobile stake, part of an “asset monetization” to fund a $40 billion investment in OpenAI by year-end.
The sale comes as Wall Street questions whether AI infrastructure spending will pay off and as OpenAI CEO Sam Altman faces scrutiny for publicly denying he sought federal loan guarantees just days after his company explicitly requested them in a letter to the White House.
SoftBank’s Vision Fund posted a blowout investment gain of $23.4 billion (¥3.54 trillion) for the quarter, $14.3 billion (¥2.16 trillion) of which came from marking up its OpenAI holdings to a pre-money valuation of $260 billion.
The gains helped the company more than double net income to $19.3 billion (¥2.924 trillion), up 190.9% from the previous year.
The Nvidia sale marks SoftBank’s second exit from the chipmaker, after an initial $4 billion stake bought in 2017 and sold in early 2019. The group later re-entered before offloading its position again in October.
Following the money trail
To finance its OpenAI investment, SoftBank issued $4.1 billion (¥620 billion) in yen bonds, $4.2 billion in foreign debt, and arranged bridge loans of $8.5 billion for OpenAI and $6.5 billion for ABB Robotics.
“As SoftBank’s investment in OpenAI was very large the company had to use its existing assets to finance new investments,” the firm’s Chief Financial Officer Yoshimitsu Goto said in a press briefing, as cited in a CNBC report.
SoftBank agreed on March 31 to invest up to $40 billion in OpenAI, with $30 billion of its own capital, with $10 billion funded in April and $22.5 billion set for December, according to the filing.
The robotics acquisition aligns with SoftBank’s stated mission to “realize artificial super intelligence (ASI) for the advancement of humanity,” focusing on AI chips, robots, data centers, and energy, and investing in leading generative AI firms, according to the filing.
SoftBank’s sale of its Nvidia stake is a “strong, but hugely unexpected, move away from hardware and toward AI projects and the data that fuels them,” Jiahao Sun, CEO of decentralized AI platform FLock.io, told Decrypt.
Market warning signs
Taiwan Semiconductor Manufacturing Co, Nvidia’s main supplier, posted 16.9% revenue growth for October, its slowest pace since February 2024.
Short-seller Michael Burry’s Scion Asset Management disclosed bearish wagers on Nvidia last week, even as Meta, Alphabet, Amazon and Microsoft plan to collectively spend over $400 billion on AI infrastructure in 2025.
Nvidia (NVDA) shares dipped 1.46% in pre-market trading after closing at $199.05, while SoftBank Group (SFTBY), which ended the prior session at $72.40 up 2.74%, was little changed before market open, according to Yahoo Finance data.
Generally Intelligent Newsletter
A weekly AI journey narrated by Gen, a generative AI model.