SoftBank Group has sold its entire $5.8 billion stake in Nvidia and trimmed major holdings in T-Mobile as part of a sweeping asset reallocation to finance its $22.5 billion expansion into OpenAI, underscoring founder Masayoshi Son's full-scale pivot toward artificial intelligence.
In its fiscal second-quarter earnings presentation Tuesday, the Japanese conglomerate disclosed that it divested all 32.1 million Nvidia shares in October for approximately $5.8 billion (£4.4 billion). Between June and September, the company also sold 40.2 million T-Mobile shares for $9.1 billion (£6.9 billion). SoftBank raised an additional $2.3 billion (£1.7 billion) through partial sales and settlement of collar transactions in Deutsche Telekom shares.
The proceeds are being directed into what Son has called SoftBank's "AI revolution." In March, the company committed follow-on investments of up to $40 billion (£30.4 billion) in OpenAI Global, of which $10 billion was syndicated to co-investors. Last month, SoftBank's board approved a $22.5 billion (£17.1 billion) infusion through Vision Fund 2, which will lift its ownership in OpenAI from 4% to 11% once completed in December.
"The reason we were able to have this result is because of September last year, when we first invested in OpenAI," said Yoshimitsu Goto, SoftBank's chief financial officer. He described OpenAI's current $500 billion (£380.3 billion) valuation as "one of the largest in the world."
Goto added that SoftBank's asset sales and a $19 billion (£14.4 billion) gain from its Vision Fund helped the group double quarterly profit. "We want to provide many investment opportunities for investors while maintaining our financial strength," he said. "Through those options and tools, we make sure that we are prepared for funding in a very safe manner."
To support its aggressive expansion, SoftBank also increased a margin loan secured by its Arm Holdings shares from $13.5 billion (£10.2 billion) to $20 billion (£15.2 billion). Roughly $11.5 billion (£8.7 billion) of the facility remains undrawn, according to the filing.
Nvidia's stock dropped nearly 3% on Tuesday following news of SoftBank's exit. Rolf Bulk, an equity analyst at New Street Research, said the move should not be viewed as a lack of confidence in the chipmaker. "SoftBank's decision is driven by its need to raise a minimum of $30.5 billion (£23.1 billion) in fiscal Q3, including $22.5 billion for OpenAI and $6.5 billion (£4.9 billion) for Ampere," Bulk told investors.
SoftBank confirmed it has already secured a $6.5 billion bridge loan for the U.S. semiconductor firm Ampere's acquisition. Despite divesting from Nvidia, the company remains heavily reliant on Nvidia's technology through multiple AI ventures, including its $500 billion Stargate data-center project in the United States.
