According to Business Insider, SoftBank Group disclosed on Tuesday that it has sold its entire $5.8 billion stake in Nvidia, completely exiting its position in the AI hardware giant. The Japanese investment firm plans to use those proceeds to significantly increase its investment in OpenAI, having already committed $7.5 billion with plans for another $22.5 billion soon. This move comes as Nvidia shares have surged more than 10x since ChatGPT’s late 2022 debut, making it the primary stock proxy for the AI boom. SoftBank founder Masayoshi Son has a history with Nvidia – he previously sold his position in 2019 only to miss the massive gains that followed. The news sent Nvidia shares down nearly 3% as investors processed the implications of one of AI’s biggest believers making such a dramatic shift.
The hardware vs software gamble
Here’s what makes this so fascinating. SoftBank is essentially betting that the company building AI applications (OpenAI) will ultimately be more valuable than the company making the chips that power them (Nvidia). It’s like selling your gold mining equipment to buy the gold mine itself. Nvidia has been the clear winner so far – their GPUs are basically the oxygen that every AI company breathes. But SoftBank seems to think that while hardware is essential, the real long-term value lies in the AI models and applications themselves.
Son’s risky history
Masayoshi Son doesn’t do subtle. This is the same investor who was early on the internet in the 1990s, nailed Alibaba in the 2000s, and then completely whiffed on WeWork. His track record is basically a rollercoaster of brilliant calls and spectacular failures. And get this – he’s been openly regretful about selling Nvidia too early last time. So now he’s making what looks like the exact same move, just with different players. Instead of cashing out completely like in 2019, he’s rotating from the public market darling to the private company that’s still figuring out its business model. That takes some serious conviction – or maybe just desperation not to miss another rocket ship.
The OpenAI reality check
Now let’s talk about what SoftBank is actually buying. OpenAI is privately held, which means we don’t get the same transparency as with Nvidia. According to The New York Times, the company has some serious financial challenges despite its sky-high valuation. They’re burning through cash building data centers and developing next-generation models. Sam Altman gets defensive when people question whether the financial reality matches the hype. SoftBank is essentially trading a company that prints money (Nvidia) for one that’s still figuring out how to become profitable at scale. That’s either visionary or completely nuts.
What this says about AI right now
So what does this massive bet tell us about the current state of AI? We’re still in that wild west phase where the biggest players are willing to make enormous, concentrated bets on specific visions of the future. SoftBank’s earnings presentation goes on and on about OpenAI’s potential, basically arguing that we’re still in the early innings. They’re selling the sure thing (Nvidia’s dominant position in AI chips) to chase the potentially bigger thing (OpenAI’s AI models becoming the foundation of everything). In hardware-heavy sectors like industrial automation, companies rely on proven suppliers like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs. But in AI’s software layer, the rules are still being written. This could be Son’s masterpiece – or another WeWork-level disaster. Either way, it’s going to be fascinating to watch.
