SoftBank tanks after $5.8-bn Nvidia stock sale

by AFP Staff Writers
Tokyo (AFP) Nov 12, 2025
Shares in SoftBank Group plunged as much as 10 percent on Wednesday after the Japanese tech investor said it had sold all its stock in US chip titan Nvidia for $5.8 billion.

Analysts said the move was to free up cash to pay for massive investments in AI promised by SoftBank's charismatic founder Masayoshi Son, including in US megaproject Stargate.

Shares in Nvidia, whose cutting-edge processors are used to train and run artificial intelligence models, fell three percent in New York.

Optimism over the promise of AI technology has sparked a rush of multi-billion-dollar deals, sending tech shares soaring.

Wall Street's tech-rich Nasdaq index has surged 25 percent since May -- leading to concerns of a market bubble that could burst.

"The sale is a sign of Son's desperation to finance his commitment to OpenAI CEO Sam Altman," wrote Martin Peers, at specialist tech news site The Information.

SoftBank is a major investor in ChatGPT creator OpenAI.

"He is scouring the proverbial cushions on SoftBank's couch for spare change," he said, noting that "the Nvidia stake was, indeed, the equivalent of pennies."

SoftBank, OpenAI and cloud giant Oracle are jointly leading the $500 billion Stargate project to build AI infrastructure in the United States announced by President Donald Trump in January.

SoftBank's shares were trading down 5.4 percent in mid-morning trade Wednesday, having lost as much as 10 percent soon after the open.

The company had reported on Tuesday that net profit more than doubled in the second quarter to a colossal 2.5 trillion yen ($16.2 billion) thanks to booming AI shares.

Chief financial officer Yoshimitsu Goto said the decision to sell Nvidia shares was taken "so that the capital can be utilised for our financing", without elaborating, Bloomberg News reported.

"I can't say if we're in an AI bubble or not," he said.

Mary Pollock of CreditSights noted the "strong business case" for generative AI technology and "OpenAI's unique position in the industry today".

But "while the picture today is rosy, the risk that AI valuations are frothy cannot be disregarded", she warned after SoftBank's earnings release.

"It is far from certain that confidence in AI's value proposition, the timeline by which revenues are achieved, and investors' expectations for growth all continue to evolve in-step."

AI stock boom delivers bumper quarter for Japan's SoftBank
Tokyo (AFP) Nov 11, 2025 - Japan's SoftBank Group reported Tuesday that net profit more than doubled in the second quarter thanks to a boom in AI-related share prices that has fuelled fears of a market bubble.

The tech investment giant -- a major backer of ChatGPT-maker OpenAI -- logged a net profit of 2.5 trillion yen ($16.2 billion) in July-September, up from 1.2 trillion yen in the same period last year.

SoftBank also announced it sold $5.8 billion worth of shares in US chip giant Nvidia last month, after the quarter had ended.

The group's earnings often swing dramatically because it invests heavily in tech start-ups and semiconductor firms, whose stocks are volatile.

In recent months optimism over the promise of AI technology has sparked a rush of multi-billion-dollar deals -- sending tech shares soaring worldwide.

Wall Street's tech-rich Nasdaq index has surged 25 percent since May.

But that has fed concerns of a market bubble that could eventually burst, like the dot-com boom that imploded at the turn of the millennium.

Fears that AI stock valuations are too high sparked a market sell-off last week.

Nvidia, whose chips are used to train and power generative AI systems, recently became the world's first company valued above $5 trillion, though its market cap has since receded to around $4.8 trillion.

SoftBank did not give a reason for the Nvidia stock sale in its earnings statement.

But Bloomberg News said it could reflect plans by the Japanese company's flamboyant founder Masayoshi Son to boost his own influence in the AI field.

Son, 68, believes "artificial superintelligence" is on the horizon, which will herald a technological revolution with new inventions and medicine.

He appeared alongside US President Donald Trump at the White House in January when SoftBank teamed up with OpenAI and cloud giant Oracle to lead the $500 billion Stargate project to build AI infrastructure in the United States.

By some estimates, OpenAI has signed approximately $1 trillion worth of infrastructure deals in 2025, including a $300 billion Oracle agreement.

SoftBank stock has "had a strong run" itself, said a Jefferies equity research published last month.

"The recent surge appears to be driven by excitement around its exposure to OpenAI," it said.

The firm has soared more than 140 percent so far in 2025.

But Jefferies also listed some reasons for caution.

"While OpenAI has strong consumer visibility, its share in (the) enterprise market is tiny. Its transition from non-profit to for-profit remains unresolved, and its relationship with Microsoft is still evolving," the note said.

And "the competitive landscape is intense, with Google, Anthropic, Grok, and others investing heavily".

SoftBank said last month it would buy Swiss-Swedish firm ABB Robotics for nearly $5.4 billion as part of its plans to develop so-called physical AI.