Japanese conglomerate SoftBank Group Corp. announced on Tuesday that it has sold its entire stake in Nvidia Corporation, raising approximately US $5.8 billion. The stake sale, executed in October, marks a deliberate move by SoftBank to reallocate capital toward its deepening commitments in artificial intelligence. The company reported that for the six-month period ending September, net profit soared to about ¥2.5 trillion (roughly US $13 billion), with sales rising 7.7 % year-on-year to ¥3.7 trillion (around US $24 billion).
Strategic Divestiture Signals Pivot in Investment Focus
SoftBank framed the sale as part of a broader strategic redirection, stating that the proceeds will help support growing investment in AI ventures — notably its expanding relationship with OpenAI, a leader in generative artificial intelligence. The company’s chairman, Masayoshi Son, has positioned SoftBank at the forefront of the AI infrastructure race, with the Nvidia divestment representing a clear shift from holding legacy chip-maker equity to deploying capital into next-generation AI platforms and associated data-center projects.
Market Response and Industry Implications
The announcement prompted a reaction in equity markets, with Nvidia shares dropping more than 2 % in early trading following the disclosure, after surging in prior sessions amid the AI-chip boom. Analysts noted that the timing of SoftBank’s exit raises questions about whether valuations in the AI hardware and infrastructure sector may have become overheated. The sale also signals the growing pressure on technology investors to monetize holdings of best-performing companies in order to fund new bets.
While SoftBank stated that the decision to sell did not reflect concerns specifically about Nvidia’s performance, observers flagged that the company had a history of exiting before major rallies. Nonetheless, SoftBank continues to retain indirect exposure to the AI chip ecosystem through investments in organisations such as Arm Holdings and Taiwan Semiconductor Manufacturing Company (TSMC), both of which stand to benefit from heightened demand for AI processing hardware.
Reinforcing the AI Playbook: Big Bets and Rising Risk
SoftBank’s divestment of Nvidia shares comes amid its announcement earlier this year of the “Project Stargate” initiative, a multi-hundred-billion-dollar program in partnership with OpenAI and others, aimed at building out large-scale data-center and AI compute infrastructure. Reports suggest that SoftBank has committed tens of billions of dollars directly into OpenAI and related ventures, making the freed capital from the Nvidia sale a key component in funding its ambition to become a central player in the AI value chain.
Still, the strategy comes with heightened exposure. With SoftBank leveraging considerable funds to back rapid AI expansion, critics warn the company is taking on increased risk in a sector where some valuations may outpace near-term earnings prospects. The company’s elevated profit in the recent quarter was driven in large part by investment gains on its vision fund and OpenAI holdings, underlining the dependence on the broader success of its AI bets.
Broader Context for Japan’s Tech Investment Landscape
SoftBank’s move also must be viewed within the broader Japanese and global strategic competition over AI. Japan has signalled intent to enhance its domestic AI capabilities and infrastructure, and SoftBank’s close alignment with OpenAI is consistent with national ambitions to deploy advanced AI services domestically and globally. The company’s pivot away from legacy hardware holdings toward AI platforms mirrors a wider industry trend.
However, as the AI sector undergoes rapid growth, some market watchers caution about the emergence of a “bubble” in AI-driven equities. SoftBank’s timely exit from its Nvidia position may reflect an awareness of this environment, though whether the risk is mitigated remains to be seen.
