SoftBank's Nvidia stake sale fuels AI bubble fears

SoftBank Group has sold about 32.1 million Nvidia shares for roughly 5.8 billion dollars to back Masayoshi Son's aggressive AI strategy, including a pledge to fund OpenAI and the Stargate data center expansion project. The move comes as AI enthusiasm has driven a huge rally in tech stocks, and it coincides with a dip in Nvidia's shares in early trading. The sale underscores a shift from the rallying period to a more cautious stance as investors weigh the fundamentals behind sky high valuations.

Market nerves grew after CoreWeave, an AI cloud provider, cut its revenue forecast following a delayed contract, sending its stock down about 9 percent and feeding talk of an AI bubble. Analysts have warned that the sector may be overheating, even as SoftBank increases its OpenAI commitments and pursues aggressive AI bets, including the Stargate initiative to expand US data-center capacity.

The timing also reflects SoftBank's tricky track record with Nvidia, having previously missed a much larger rally when it sold shares in 2019, only to watch Nvidia surge later. Still, SoftBank signaled continued faith in OpenAI with reports that it is approving the remaining 22.5 billion of its investment in the AI lab, a sign that its long term plan remains heavily centered on AI leadership. The strategy marks a pivot toward funding AI ventures while pruning exposure to large equity stakes that could complicate the group balance sheet.

Overall, the sale suggests SoftBank is recalibrating its AI empire as market debates over valuations and the pace of AI adoption continue. Investors will be watching how Nvidia and other AI names respond to this shift, and whether SoftBank's renewed OpenAI commitments translate into lasting growth.

Cover image source: SoftBank's OpenAI wager in focus as analysts upgrade share price target 🔗

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