SoftBank has sold its entire stake in U.S. chipmaker Nvidia for $5.83 billion, as the Japanese conglomerate doubles down on artificial intelligence with a massive $22.5 billion investment in OpenAI, the maker of ChatGPT.
In its earnings report on Tuesday, the Tokyo-based firm said it sold 32.1 million Nvidia shares in October and also offloaded part of its T-Mobile stake for $9.17 billion.
“We want to provide a lot of investment opportunities for investors, while we can still maintain financial strength,” said SoftBank’s chief financial officer Yoshimitsu Goto during an investor presentation. He added that the asset sales were part of the company’s broader “asset monetization” strategy, ensuring it is “ready for funding in a very safe manner.”
Nvidia shares dipped 2% on Tuesday following the announcement.
A person familiar with the matter told CNBC that proceeds from the Nvidia and T-Mobile sales, along with a margin loan on SoftBank’s Arm holdings, will serve as “sources of cash that will be used to fund the $22.5 billion investment in OpenAI.” The funds will also support other projects, including the company’s planned acquisition of ABB’s robotics division.
The source added that the Nvidia divestment was not related to concerns about artificial intelligence valuations.
SoftBank’s relationship with Nvidia stretches back several years. Its Vision Fund first invested around $4 billion in the chipmaker in 2017 before selling those shares in 2019. Despite this latest sale, the firm remains closely tied to Nvidia through AI initiatives such as the $500 billion Stargate data center project in the United States.
“This should not be seen, in our view, as a cautious or negative stance on Nvidia,” said Rolf Bulk, equity research analyst at New Street Research. He explained that SoftBank needed “at least $30.5 billion of capital for investments in the Oct-Dec quarter, including $22.5 billion for OpenAI and $6.5 billion for Ampere,” representing “more in a single quarter than it has invested in aggregate over the two prior years combined.”
Morningstar analyst Dan Baker echoed that view, noting the sale does not signal a change in strategy. “[SoftBank] made a point of saying that it wasn’t any view on NVIDIA. … At the end of the day, they are using the money to invest in other AI related companies,” he said.
The asset sales, combined with a $19 billion profit gain from SoftBank’s Vision Fund, helped the company more than double its earnings in the second quarter.
SoftBank’s Vision Fund has expanded its AI footprint aggressively, backing companies involved in semiconductors, large language models, and robotics.
“The reason we were able to have this result is because of September last year, that was the first time we invested in OpenAI,” Goto said. He noted that OpenAI’s latest valuation of $500 billion places it among the world’s most valuable companies.
Following its recapitalization, SoftBank’s stake in OpenAI will grow from 4% to 11%. The firm could “potentially” raise its investment further depending on OpenAI’s performance and future valuations, though it does not plan to exceed 40% ownership.
Despite recent volatility in its share price amid global AI market jitters, Goto said SoftBank aims to give investors more opportunities through its four-for-one stock split. “Our share price recently has been going up and down dynamically … we want to provide as many invest opportunities as possible,” he added.
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