SoftBank Group Corp has sold its stake in Nvidia, raising fears that valuations of companies at the centre of the artificial intelligence (AI) boom may have peaked.
The Japanese technology investment company said it had divested all 32.1 million Nvidia shares it held in October for US$5.8 billion (A$8.9 billion).
The stake represented 0.13% of the computer chip manufacturer, which is the world’s most valuable company.
The details were contained in an investor briefing document released at the same time as Softbank's second-quarter results.
The funds raised are earmarked for AI investments like the $500 billion Stargate project to expand U.S. data-centre capacity and up to $40 billion of funding for OpenAI.
Analysts said the sale indicated Softbank founder Masayoshi Son expected a pullback in the price of Nvidia, whose valuation has soared more than 1,200% surge over the last three years and at one point exceeded $5 trillion.
The sale comes after warnings from Wall Street banks about stock valuations, with the Morgan Stanley and Goldman Sachs CEOs concerned equities face a potential ‘drawdown’ and as short seller Michael Burry bets against Nvidia and other AI companies.
But Softbank Chief Financial Officer Yoshimitsu Goto was quoted in a Yahoo Finance article saying during an earnings conference call: “I can’t say if we’re in an AI bubble or not.”
At the time of writing Nvidia shares (NASDAQ: NVDA) were trading $5.31 (2.67%) lower at $193.74 on Tuesday (Wednesday), capitalising the company at $4.70 trillion, down from the record high of $212.19 in early November.
Softbank shares (TYO: 9984) closed 440 yen (1.98%) higher at 22,695 yen, capitalising the company at 32.38 trillion yen (US$210.094 billion).
