Softbank Dumps 100% of Nvidia Shares

Softbank, the Japanese tech holding company run by legendary Masayoshi Son, sold 100% of its Nvidia Corp. (NASDAQ: NVDA) shares, which yielded $5.8 billion. It is speculated that the money will be allocated to other tech investments, which Son may believe yield larger returns.

Softbank holds equity positions in several artificial intelligence (AI) companies, led by OpenAI. It is also part of a huge U.S. AI infrastructure play known as Stargate. The $500 billion initiative was announced at the White House on January 21 of this year.

SoftBank did not specify exactly where the money would go, but it may be an indication that Son believes the better part of Nvidia’s run-up is behind it. Its shares have increased by almost 1,400% over the past five years. Nvidia is also the most valuable company in the world, with a market capitalization of $4.8 trillion.

It is impossible to figure out Son’s thinking. Worries about Nvidia’s future have started to grow. Among the reasons is that its high-end chips are locked out of China as part of a trade war with the United States. China also says it can produce comparable chips. And there are concerns that AI valuations have reached a bubble and the industry is in for a collapse.

Softbank may just need the money. David Gibson at MST Financial wrote, according to the Financial Times, “Longer term, I estimate [SoftBank Group] has committed $113bn of investments, but only has funding ability of $58.5bn and hence it has overcommitted.”

Time and Nvidia’s share price will tell if Son made the right call.

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