SoftBank has sold a significant stake in NVIDIA, one of the world's leading chipmakers, for $5.8 billion as it pours more funds into OpenAI, the developer behind the popular ChatGPT chatbot.
The Japanese tech investor's move has raised eyebrows among investors and analysts, who see it as a sign that SoftBank is doubling down on its bets in the rapidly evolving AI space. The sale comes amid concerns about valuations in the sector, with some arguing that an AI bubble is forming.
NVIDIA's market value had surged to over $5 trillion last year, making it the world's first billion-dollar company. However, the stock has since fallen back from that peak, sparking fears that investors may be losing confidence in the tech giant's growth prospects.
SoftBank's decision to sell its stake in NVIDIA is seen as a way for the firm to bankroll its investments in OpenAI, which has received significant attention in recent months due to its groundbreaking chatbot technology. The Japanese investor's move suggests that it believes OpenAI offers better returns on investment than established players like NVIDIA.
According to SoftBank's chief financial officer, Yoshimitsu Goto, the decision was made as part of a broader strategy to finance new investments in AI-related ventures. "This year our investment in OpenAI is large – more than $30 billion needs to be made – so for that we do need to divest our existing portfolios," he said.
The sale has sent shockwaves through the tech sector, with shares in NVIDIA falling 3.5% and other chipmakers like Arm and Micron also taking a hit. Analysts are interpreting the move as a sign that investors are becoming increasingly cautious about valuations in the AI space.
Russ Mould, investment director at AJ Bell, said: "People are looking for clues that the tech rally is close to the top, and SoftBank's profit-taking in the chip giant is significant." He believes the move suggests that SoftBank has become convinced that NVIDIA's role in the AI world will be less prominent than that of OpenAI.
The Japanese tech investor's move has raised eyebrows among investors and analysts, who see it as a sign that SoftBank is doubling down on its bets in the rapidly evolving AI space. The sale comes amid concerns about valuations in the sector, with some arguing that an AI bubble is forming.
NVIDIA's market value had surged to over $5 trillion last year, making it the world's first billion-dollar company. However, the stock has since fallen back from that peak, sparking fears that investors may be losing confidence in the tech giant's growth prospects.
SoftBank's decision to sell its stake in NVIDIA is seen as a way for the firm to bankroll its investments in OpenAI, which has received significant attention in recent months due to its groundbreaking chatbot technology. The Japanese investor's move suggests that it believes OpenAI offers better returns on investment than established players like NVIDIA.
According to SoftBank's chief financial officer, Yoshimitsu Goto, the decision was made as part of a broader strategy to finance new investments in AI-related ventures. "This year our investment in OpenAI is large – more than $30 billion needs to be made – so for that we do need to divest our existing portfolios," he said.
The sale has sent shockwaves through the tech sector, with shares in NVIDIA falling 3.5% and other chipmakers like Arm and Micron also taking a hit. Analysts are interpreting the move as a sign that investors are becoming increasingly cautious about valuations in the AI space.
Russ Mould, investment director at AJ Bell, said: "People are looking for clues that the tech rally is close to the top, and SoftBank's profit-taking in the chip giant is significant." He believes the move suggests that SoftBank has become convinced that NVIDIA's role in the AI world will be less prominent than that of OpenAI.
anyway i guess softbank thinks openai has the potential 2 disrupt the ai space way more than nvidia does? idk about that tbh, AI bubble or not 
they were so in on NVIDIA's growth and now it seems like their minds are changed. i mean, it was only a year ago that nvidia was worth over $5 trillion lol, now it's down 3.5% after the sale... something just doesn't add up here.
or maybe softbank just thinks openai is gonna revolutionize everything 
anyway, i was saying that this move could be a sign that the ai space is getting saturated and it's hard to tell what's gonna be the next big thing 
they're putting all their chips on openai which has that crazy chatbot tech lol can't wait to see what happens next 
. i mean, nvidia was at like $5 trillion in value last year... what changed? did softbank just lose confidence in tech giants? 
. plus, this sale is sending shockwaves through the whole tech sector... what's next? 
- Theodore Roosevelt 
. I mean, who wouldn't want a piece of that ChatGPT action? 
. The AI bubble thing might be real though... investors are definitely getting cautious about valuations 
.