SoftBank ditches Nvidia in favour of deeper dive into AI

Japanese multinational investment company SoftBank said it had sold its remaining stake in Nvidia for $5.83 billion (€5bn) as it pivots towards AI investments.

SoftBank also reported stronger-than-expected earnings for the three months to 30 September, posting a net profit of ¥2.5 trillion (€14bn), more than double the ¥1.18 trillion (€6.6bn) recorded a year earlier.

The jump was fuelled by gains in its Vision Fund portfolio, which benefited from soaring valuations of AI-related firms, suggesting that its renewed focus on artificial intelligence is beginning to pay off after years of uneven returns.

Revenue at the Japanese company also grew, helped by improving performance across SoftBank’s technology holdings and its telecom unit.

It sold off its stake in Nvidia in October bringing an end to its long exposure to the American tech giant, which recently hit a market capitalisation of $5tr (€4.3tr).

“We want to provide a lot of investment opportunities for investors, while we can still maintain financial strength," SoftBank’s Chief Financial Officer and Senior Managing Director Yoshimitsu Goto said at an investor presentation.

“So through those options and tools we make sure that we are ready for funding in a very safe manner," Goto added.

This marks the second time SoftBank has offloaded Nvidia shares, a move that comes as a surprise given the chipmaker’s status as one of the best-performing US stocks, particularly amid President Trump’s drive to ramp up investment in AI-related industries.

SoftBank’s renewed focus on artificial intelligence may also strike some observers as counterintuitive, coming amid investor concerns of an impending AI bubble burst. By deepening its AI bets just as talk of a potential bubble intensifies, SoftBank is signalling confidence that the current boom still has room to run, even as others brace for a possible correction.

"There are various opinions but SoftBank's position is that the risk of not investing is far greater than the risk of investing," Yoshimitsu Goto said at a briefing in Tokyo.

It caps a significant year for SoftBank's investment in AI. In March, SoftBank agreed to spearhead a funding round worth up to US$40bn (€34.55bn) for OpenAI with its total investment expected to hit $34.7bn (€30bn) by December, while in February it joined with Open AI and Oracle in announcing an investment of $500bn (€431.9bn) in the Stargate AI infrastructure project.

SoftBank’s unabashed focus on AI will likely increase investor speculation that it will take a direct stake in OpenAI.