SoftBank, the Japanese tech giant, has sold its entire stake in the American semiconductor company Nvidia. The funds raised from this sale are expected to fuel a substantial investment in OpenAI, the developer of ChatGPT.
On Tuesday, SoftBank revealed during its earnings call that it had sold 32.1 million Nvidia shares for 5.83 billion USD. Concurrently, the company offloaded part of its stake in U.S. carrier T-Mobile for 9.17 billion USD.
At an investor briefing, SoftBank’s Chief Financial Officer Yoshimitsu Goto explained, “We want to provide a lot of investment opportunities for investors, while we can still maintain financial strength.” He added that the stake sale is part of their “asset monetization” and a process to build a foundation for stable financing.
SoftBank emphasized that the sale was unrelated to concerns about AI company valuations. Previously, the SoftBank Vision Fund acquired a 4 billion USD stake in Nvidia in 2017, only to sell it off entirely in 2019.
SoftBank remains deeply committed to various AI ventures leveraging Nvidia technology, including the ambitious 500 billion USD U.S. data center project, Stargate.
Market analysts don’t view this sale as a loss of faith in Nvidia. Rolf Bulk of New Street Research pointed out that SoftBank needs at least 30.5 billion USD for investments in the fourth quarter alone, with 22.5 billion USD earmarked for OpenAI and 6.5 billion USD for Ampere. He noted that this amount surpasses their total investments over the past two years.
The Vision Fund reported a 19 billion USD valuation gain this quarter, effectively doubling SoftBank’s overall profits. Goto attributed this success to their initial investment in OpenAI last September, noting that OpenAI’s current valuation of around 500 billion USD places it among the world’s most valuable companies.
This latest investment will boost SoftBank’s stake in OpenAI from 4% to 11%. The company is open to further investments based on OpenAI’s performance and valuation, though it has stated it won’t seek a controlling stake exceeding 40%.
