SoftBank Group Corp. shares tumbled as much as 10% on Wednesday after the Japanese tech giant disclosed it had sold its $5.8 billion stake in Nvidia (NVDA.O), raising questions among investors about the scale and sustainability of its deepening push into artificial intelligence.
The sell-off comes as SoftBank, led by founder and CEO Masayoshi Son, intensifies its “all-in” commitment to AI. The company is preparing a $22.5 billion follow-on investment in ChatGPT creator OpenAI, acquiring U.S. chipmaker Ampere for $6.5 billion, and buying Swiss firm ABB’s (ABBN.S) robotics division in a $5.4 billion deal.
CreditSights analyst Mary Pollock estimates SoftBank has pledged more than $41 billion in fresh investments and acquisitions. “Though SBG’s liquidity position has improved relative to when it issued its hybrids in October, we still estimate it will need to be proactive funding its recent (more than) $41 billion investment spend,” she wrote in a note.
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Analysts said the Nvidia divestment reflects capital reallocation rather than a retreat from AI. “The position was large, liquid, and easy to monetise, and likely SoftBank sees even more upside in reallocating capital to OpenAI,” said Rolf Bulk of New Street Research.
SoftBank also disclosed it sold $9.2 billion worth of T-Mobile US (TMUS.O) shares earlier this year as part of its effort to raise liquidity. Despite the heavy selling, Son has remained outspoken in his belief that artificial intelligence will define the next generation of global corporate leaders.
The company’s shares, which had surged fourfold between April and October, trimmed losses to close 3.46% lower on Wednesday. Nvidia and Arm Holdings, the chip designer majority-owned by SoftBank, both slipped around 3% overnight.
SoftBank has turned to bond sales and loans to sustain its investment spree, securing an $8.5 billion loan to back its OpenAI stake and arranging a $6.5 billion bridge facility for the Ampere acquisition. Its loan-to-value ratio fell slightly to 16.5% at the end of September, which CFO Yoshimitsu Goto described as “actually a bit too safe.”
Navneet Govil, CFO of SoftBank’s Vision Fund, dismissed fears of overheating in the AI market. “What’s different between the dotcom boom and today is that AI companies are generating meaningful revenues,” he told Reuters. “There’s a lot of talk about capex spend, but it’s actually driven by demand.”