SoftBank sells entire USD5.8b Nvidia stake to fund OpenAI, Stargate deals
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The news: SoftBank sold its entire USD5.8 billion stake in Nvidia in October to help fund a sweeping push into AI, centred on its record USD30 billion commitment to OpenAI.
The company disclosed the sale of 32.1 million Nvidia shares in its quarterly earnings, where CFO Yoshimitsu Goto said in a call the divestment was “nothing to do with Nvidia itself” but was needed to raise capital for financing.
The context: The move adds to SoftBank’s scramble for cash to support initiatives such as the USD500 billion Stargate data centre project with OpenAI and Oracle.
The OpenAI investment (USD7.5 billion of which was made earlier this year) had helped lift SoftBank’s September quarter profit to ¥2.5 trillion ($24.9 billion), more than double the previous year’s result.
It comes as SoftBank shares have surged over 200% this year and the company announced a 4-for-1 stock split effective 1 January.
The Nvidia exit follows earlier asset sales, including USD9.2 billion worth of T-Mobile shares. Nvidia shares dropped over 3% following the news, amid rising market concern that AI valuations may have outpaced fundamentals.
