SoftBank has announced the full sale of its Nvidia shares in a deal worth $5.83 billion, marking another strategic step in its ‘asset monetization’ strategy and boosting investments in artificial intelligence. According to company reports, it sold 32.1 million stocks of the American chip manufacturer in October. Simultaneously, SoftBank reduced its stake in T-Mobile, netting an additional $9.17 billion. SoftBank CFO Yoshimitsu Goto emphasized to investors that these stock sales are part of a structured plan to prepare for new investments while maintaining a sustainable balance. ‘We aim to provide a plethora of investment opportunities for investors while keeping financial reliability,’ he stated, adding that such operations ensure the company is prepared for financing in a ‘very safe manner.’
The news of SoftBank’s exit from Nvidia temporarily affected the market: the chipmaker’s shares fell by 0.95% in pre-market trading on Tuesday. Yet, this isn’t SoftBank’s first complete exit from Nvidia; back in 2017, the Vision Fund amassed a stake worth about $4 billion, which was fully sold by January 2019. Despite the current deal, SoftBank’s business remains closely intertwined with Nvidia’s technology- the Tokyo-based group is involved in numerous large-scale AI projects dependent on its solutions, including the $500 billion Stargate data center project.
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Several analysts view this share disposal not as a signal of distrust in Nvidia, but as a step to form an investment resource toward new objectives. According to New Street Research’s analyst Rolf Bulka, SoftBank needs at least $30.5 billion of capital for investments from October to December, including $22.5 billion for OpenAI and $6.5 billion for Ampere. He notes that this is more in a single quarter than the total company’s investments over the previous two years. Morningstar analyst Dan Baker also stated he doesn’t see a change in course: according to him, SoftBank uses freed-up funds for investments in other AI-related companies, rather than changing its relationship with Nvidia. The Vision Fund remains the key driver of the current strategy, which by the end of the second financial quarter recorded ‘explosive’ growth figures, helping the conglomerate more than double its overall quarterly results.
The Vision Fund actively invests throughout the entire AI technology creation chain- from chips to large language models and robotics. According to Goto, the initial investment in OpenAI last September was a significant success factor. He pointed out that OpenAI’s valuation at $500 billion on a fair value level places it among the world’s largest companies by this metric. Amid sharp fluctuations in the technology sector and concerns of a possible AI market overheat, SoftBank’s shares experienced increased volatility last week. Goto noted that the company seeks to offer shareholders more opportunities to partake in business growth and reminded them of the announced four-to-one stock split. He stated that this is part of an overall policy to broaden the investor pool and increase share accessibility.
In aggregate, the exit from Nvidia, the partial sale of the T-Mobile stake, and the Vision Fund’s record profit show that SoftBank is concentrating resources around major AI projects, primarily investments in OpenAI. For the market, this means strengthening SoftBank’s role as one of the largest private sources of capital in AI infrastructure and software platforms, while the company demonstrates a willingness to strategically redistribute its portfolio for its chosen technological bet.
