Softbank dumps its entire Nvidia portfolio worth $5.8 billion as its CEO goes all-in on OpenAI to the tune of $30 billion

SoftBank Group fully divested its $5.8 billion Nvidia stake, channeling the capital into significant AI investments, primarily OpenAI, which drove its Q2 net profit to $16.6 billion, more than double the previous year. This strategic pivot highlights CEO Masayoshi Son's aggressive, high-stakes commitment to AI, including over $30 billion in OpenAI and the $500 billion Stargate Project, despite substantial funding commitments raising questions about capital allocation and the sustainability of AI valuations. SoftBank maintains that the risk of inaction in AI outweighs investment risks, continuing its "divesting and reinvesting" strategy.

Analysis

SoftBank Group has fully divested its $5.8 billion stake in Nvidia, selling 32.1 million shares in October, marking a significant strategic pivot towards artificial intelligence. This capital reallocation contributed to a more than doubling of net profit to 2.5 trillion yen ($16.6 billion) in Q2, SoftBank's best quarterly performance since Q3 2022, primarily driven by 2.16 trillion yen in valuation gains from its OpenAI holdings.

The firm's commitment to OpenAI is substantial, with an expected total investment of $34.7 billion by year-end, contingent on a corporate restructuring for a potential public listing. This aggressive financing includes selling $9.17 billion in T-Mobile shares and expanding a margin loan backed by Arm Holdings to $20 billion, reflecting CFO Yoshimitsu Goto's strategy of divesting existing assets for AI commitments. SoftBank is also spearheading the $500 billion Stargate Project, an AI infrastructure initiative with OpenAI, despite initial delays.

Nvidia's stock experienced a 2% decline post-announcement, while SoftBank's stock has nearly tripled in 2025, positioning it as a proxy for OpenAI's success, which has seen its valuation surge to $500 billion. Despite this bullish investor sentiment, concerns persist regarding the sustainability of AI valuations and SoftBank's significant funding shortfall, with $113 billion in commitments against $58.5 billion in funding capacity. SoftBank acknowledges these risks but asserts that the risk of not investing in AI outweighs the risk of investment.

Key Decisions for Investors

• Monitor SoftBank's ability to close its stated funding gap of over $50 billion and the successful execution of OpenAI's corporate restructuring for a potential public listing, as these are critical for future capital deployment.
• Evaluate the long-term sustainability of current AI valuations and the Stargate Project's progress, considering the acknowledged delays and the substantial capital commitments involved.
• Assess the implications of SoftBank's "divesting and reinvesting" strategy on its portfolio companies, particularly given the historical context of its prior premature Nvidia exit and the mixed track record of high-stakes bets.