In a strategic shift that has sent ripples through global technology markets, the Japanese investment giant SoftBank has offloaded its entire stake in chipmaker Nvidia, raising a substantial $5.8 billion (£4.4 billion) to double down on its bets in artificial intelligence, particularly OpenAI.
A Strategic Pivot from Hardware to AI Software
The sale, which was executed in October and revealed in SoftBank's latest quarterly results, coincided with the firm reporting a more than doubling of its second-quarter net profit to 2.5 trillion yen (£12.2 billion). This impressive financial performance was largely driven by valuation gains from its existing holdings in OpenAI, the creator of the revolutionary ChatGPT.
SoftBank's Chief Financial Officer, Yoshimitsu Goto, addressed the timing of the Nvidia divestment, clarifying that it was not a reflection on the chipmaker's prospects. He explained that the company is facing a significant capital requirement for its ambitious AI investments. "This year our investment in OpenAI is large – more than $30bn needs to be made – so for that we do need to divest our existing portfolios," Goto told reporters. He emphasised that the October sale was not prompted by a specific issue with Nvidia itself but was a necessary step to finance new ventures.
Market Reaction and Rippling Effects
The announcement had an immediate impact on financial markets. Shares in Nvidia, whose high-performance processors are the bedrock of modern AI datacentres, fell by 3.5% in morning trading in New York. The sell-off was not contained to a single company; it triggered a broader downturn in the tech sector.
The Nasdaq Composite index dropped 0.85% in early trading, while other key players also saw declines. Arm, the Cambridge-based chip designer, saw its shares fall by 5.1%, and computer memory developer Micron experienced a similar slide. This collective movement underscored investor jitters about high valuations in the AI space.
Fueling the Debate Over an AI Bubble
This transaction has intensified the ongoing debate about whether the explosive growth in AI-related stocks is forming a market bubble. Nvidia's market value had seen a meteoric rise throughout 2024 and 2025, culminating in it becoming the world's first $5 trillion company at the end of October, before receding from that peak.
Russ Mould, Investment Director at AJ Bell, provided expert commentary on the situation. "People are looking for clues that the tech rally is close to the top, and SoftBank’s profit-taking in the chip giant is significant," he stated. Mould suggested that investors typically sell for one of three reasons: overly rich valuations, diminished growth prospects, or to fund a better opportunity.
He interpreted SoftBank's move as a tactical redeployment of capital. "Nvidia has had a storming run on the markets and SoftBank might think it is prudent to cash in while the going is good," Mould said. He added that while Nvidia's role in the AI ecosystem is well-established, OpenAI’s position is still evolving, potentially offering a more lucrative path for future profits. Crucially, Mould noted that this is not a retreat from AI but a refocusing, stating, "What’s important for markets is the fact that SoftBank’s exit from Nvidia isn’t the Japanese group washing its hands completely of all things AI."
To further bolster its AI war chest, SoftBank also sold a portion of its stake in T-Mobile, confirming a clear strategic priority to channel massive resources into the next wave of artificial intelligence innovation, even if it means parting with a previous trailblazer like Nvidia.
