SoftBank cashes out of Nvidia to bet everything on OpenAI

SoftBank has disclosed that it sold its entire remaining Nvidia shareholding for $5.83 billion, offloading 32.1 million shares in October ahead of its latest earnings statement. It was not the only asset sold that month: SoftBank also cut part of its T-Mobile stake for $9.17 billion. Between them, the proceeds go towards a quarter in which SoftBank needs at least $30.5 billion for new investments, including $22.5 billion for OpenAI and $6.5 billion for the chip startup Ampere — more than it invested in the two prior years combined.

The instinct behind reading this as Son swapping a diversified bet on AI infrastructure for a concentrated one on OpenAI is real, but SoftBank and its analysts have pushed back on the starker version of that story. New Street Research’s Rolf Bulk told CNBC that the sale

“should not be seen, in our view, as a cautious or negative stance on Nvidia, but rather in the context of SoftBank needing at least $30.5bn of capital for investments in the Oct-Dec quarter.”

SoftBank also remains exposed to Nvidia’s fortunes regardless of whether it holds the shares, since its Stargate data-centre programme runs on Nvidia’s chips — the equity stake and the business relationship are not the same thing. It’s also not the first time SoftBank has traded in and out of the stock: the Vision Fund built a stake in 2017 and sold out entirely in 2019, only to rebuild and now exit again.

None of that erases the concentration risk. If OpenAI’s compute needs and its revenue continue to diverge as sharply as they have this year, the capital SoftBank freed up by selling a liquid, diversified holding will have gone towards exactly the kind of spending that makes AI’s unit economics hardest to underwrite — and, by Son’s own account in December, even he wasn’t entirely comfortable making that trade.