Japanese technology conglomerate SoftBank Group Corp. (TSE: 9984) quietly completed a significant portfolio shift in October by selling its entire stake in Nvidia Corporation (NASDAQ: NVDA), generating $5.8 billion in proceeds. This decision underlines SoftBank’s intent to focus more intently on the burgeoning artificial intelligence (AI) sector, specifically its investments in OpenAI, the company behind the well-known AI chatbot ChatGPT.
SoftBank’s Nvidia stake involved 32.1 million shares, which it fully divested last month. The sale coincided with Nvidia reaching historic market milestones, including surpassing a $5 trillion market capitalization shortly before the transaction. Despite Nvidia’s impressive financial performance and dominant position in the graphics processing unit (GPU) and AI hardware markets, SoftBank’s leadership saw greater potential returns from reinvesting the capital into other AI-related ventures. The move was neither an indictment of Nvidia’s outlook nor a timing-based critique, but rather a strategic reallocation of capital to support their expanding AI interests.
This reallocation aligns with the company’s broader earnings report, which revealed a nearly threefold increase in profit during the first half of its fiscal year, climbing to about $16.2 billion (¥2.5 trillion). This remarkable profit surge was partly driven by gains from SoftBank’s Vision Fund investment activities and the revaluation of its stakes in AI pioneers including OpenAI, Taiwan Semiconductor Manufacturing Company (TSMC), and Arm Holdings.
OpenAI remains a flagship investment for SoftBank, which values the company at an estimated $260 billion. OpenAI’s ChatGPT app has experienced widespread adoption, reaching around 870 million downloads and approximately 800 million weekly active users worldwide.Â
Demonstrating confidence in the artificial intelligence market’s long-term potential, SoftBank has plans to invest an additional $22 billion in OpenAI during a new funding round scheduled for this December.
SoftBank’s chief financial officer, Yoshimitsu Goto, emphasized that the funds raised from selling Nvidia shares were reallocated to fuel further AI development rather than reflecting any dissatisfaction with Nvidia’s prospects. When questioned about the possibility of an AI investment bubble, Goto refrained from definitive statements but cautioned that the risk of missing out on AI innovation by not investing could be greater.
Beyond OpenAI, SoftBank also supports physical AI technologies and automation, exemplified by recent acquisitions such as ABB Robotics for $5.4 billion and investments in autonomous vehicle startup Wayve. These moves reflect a strategy that balances pure software AI advancements with tangible hardware and infrastructure developments, positioning the company to benefit from multiple facets of the AI ecosystem.
The sale of Nvidia shares and this intensified AI investment approach come against a backdrop of strong market performance for SoftBank itself. Shares of SoftBank, traded in Tokyo and available as depositary receipts in the U.S., have tripled in value this year thanks to their successful AI-related initiatives. This starkly contrasts with a regulatory and speculative environment where investors globally remain cautious about inflated AI valuations, adding complexity to SoftBank’s calculated risk-taking.
In essence, SoftBank’s recent actions encapsulate a clear pivot. The company is redirecting its capital from one of the AI hardware market’s leaders toward a broader AI landscape, particularly bespoke software innovation like OpenAI’s offerings and cutting-edge robotics. This move signals a deliberate, fact-based approach to managing a technology portfolio in fast-evolving sectors, ensuring they remain a central player in the future of artificial intelligence.Â
