Nov. 11 (UPI) — Softbank sold its entire stake in Nvidia for $5.83 billion to focus on artificial intelligence, the company reported Tuesday.
In its earnings statement, the Japanese company said it sold 32.1 million Nvidia shares in October to focus on its investment in OpenAI’s ChatGPT. It also said it sold some of its T-Mobile shares 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, CNBC reported.
SoftBank announced in February that it’s investing $3 billion annually with OpenAI as part of a joint venture called SB OpenAI Japan, to market OpenAI’s technology to Japanese companies. So, selling off its stake in Nvidia is a way to raise funds for that venture. The company is also investing in Stargate data centers and AI robot manufacturing sites in the U.S.
Nvidia’s stock was down 1.3% in pre-market trading.
Investors have become increasingly nervous about an AI bubble as companies have made such large investments in AI companies.
“I can’t say if we’re in an AI bubble or not,” Chief Financial Officer Yoshimitsu Goto said during an earnings conference Tuesday. SoftBank sold Nvidia “so that the capital can be utilized for our financing,” he said.
SoftBank sold off its Nvidia stock in 2019, but resumed buying again in 2020, just two years before ChatGPT came on the scene, causing a rally. It announced it had raised its stake in Nvidia to around $3 billion in March. Since then, Nvidia has captured more than $2 trillion in market value.
Then SoftBank reported a net income of $16.2 billion in its second quarter, far above the average analyst estimates.
“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 $30.5 billion of capital for investments in the October to December quarter, including $22.5 billion for OpenAI and $6.5 billion for Ampere,” Rolf Bulk, equity research analyst at New Street Research, told CNBC.
That is “more in a single quarter than it has invested in aggregate over the two prior years combined,” Bulk said.
“Our share price recently has been going up and down dynamically… we want to provide as many invest opportunities as possible,” Goto said Tuesday.