Post by : Badri Ariffin

SoftBank Group Corp. has completely divested its stake in Nvidia Corp., realizing an impressive $5.8 billion, marking a strategic realignment towards investments in artificial intelligence. This decision, driven by founder Masayoshi Son, comes as the firm aims to capitalize on the AI growth surge.

As of late March, SoftBank had bolstered its Nvidia holdings to approximately $3 billion. The recent sale, coupled with impressive returns from its Vision Fund ventures, contributed to a surprising net income of ¥2.5 trillion ($16.2 billion) in its fiscal second quarter, far surpassing analyst predictions of ¥418.2 billion.

In conjunction with this financial boost, SoftBank revealed a 4-for-1 stock split set to take effect on January 1, designed to enhance liquidity and attract shareholders.

Son’s firm now has stakes in some of the most impactful companies in the AI arena, such as OpenAI and Oracle Corp. These strategic investments have significantly lifted SoftBank’s valuations, contributing to a remarkable 78% increase in its share price over the last three months—the best quarterly performance since 2005.

SoftBank is intensifying its focus on AI and semiconductor-related projects. Current discussions involve a $30 billion investment in OpenAI, cooperation with Taiwan Semiconductor Manufacturing Co., and engagement in a $1 trillion AI production facility in Arizona. Earlier this year, the company also considered acquiring US chipmaker Marvell Technology and is looking at Ampere Computing LLC for a potential $6.5 billion deal.

While this strategy showcases promising growth opportunities, analysts express caution regarding the high valuations in the AI sector and the long-term returns on extensive investments in data center and chip infrastructure.

Investors who benefitted from SoftBank’s early AI initiatives have seen significant gains as the stock price has more than doubled in recent months. As the company embarks on a new era of substantial investments, the market remains attentive to how Son navigates these ambitious aspirations alongside responsible financial stewardship.

#Tech News #AI