SoftBank said Tuesday it has sold its entire stake in U.S. chipmaker Nvidia for $5.83 billion as the Japanese giant looks to capitalize on its “all in” bet on ChatGPT maker OpenAI.
The firm said in its earnings statement that it sold 32.1 million Nvidia shares in October. It also disclosed that it sold 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.
“So through those options and tools we make sure that we are ready for funding in a very safe manner,” he said in comments translated by the company, adding that the stake sales were part of the firm’s strategy for “asset monetization.”
Nvidia shares dipped 2% on Tuesday.
The sale of Nvidia shares, partial sale of T-Mobile shares and the margin loan on SoftBank’s holding in Arm, are all “sources of cash that will be used to fund the $22.5 billion investment in OpenAI,” a person familiar with the matter told CNBC. They added that this cash will fund other projects the firm is working on such as its acquisition of ABB’s robotics unit.
The offloading of the Nvidia stake had nothing to do with concerns about artificial intelligence valuations, the person said.
While the Nvidia exit may come as a surprise to some investors, it’s not the first time SoftBank has cashed out of the American AI chip darling.
SoftBank’s Vision Fund was an early backer of Nvidia, reportedly amassing a $4 billion stake in 2017 before selling all of its holdings in January 2019. Despite its latest sale, SoftBank’s business interests remain heavily intertwined with Nvidia’s.
The Tokyo-based company is involved in a number of AI ventures that rely on Nvidia’s technology, including the $500 billion Stargate project for data centers in the U.S.
“This 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, including $22.5bn for OpenAI and $6.5bn for Ampere,” Rolf Bulk, equity research analyst at New Street Research, told CNBC.
That amounts to “more in a single quarter than it has invested in aggregate over the two prior years combined,” Bulk said.
Morningstar’s Dan Baker added that he doesn’t see the move as representing a fundamental shift in strategy for the company.
″[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.