Shares in SoftBank Group plunged on Wednesday after the Japanese investment giant revealed it had sold its entire stake in Nvidia for $5.8bn (£4.4bn), sparking investor unease over its shifting exposure to the artificial intelligence (AI) sector.
The stock fell as much as 10.1% in early trading before paring losses to close down 3.5%, wiping roughly ¥1 trillion (£5.4bn) from its market value. At one point, as much as ¥3.2 trillion (£15.7bn) had been erased.
The sale, completed in October, delivered a major profit for SoftBank but rattled investors who view the company as a bellwether for the global AI boom. Nvidia, the $4.7 trillion (£3.6 trillion) chipmaking powerhouse whose processors underpin much of the industry, saw its own shares drop 3% on Wall Street, erasing about $188.3bn (£143.3bn) in market value.
SoftBank shares had soared nearly 150% this year, buoyed by enthusiasm for AI-related investments. But concerns have been mounting that valuations across the sector are becoming overstretched.
The caution echoes warnings from Michael Burry, the “Big Short” investor who famously predicted the 2008 financial crisis and has recently placed bets against several major AI stocks, including Nvidia.
SoftBank executives played down fears that the sale signalled a loss of confidence in AI, saying the move was driven by funding needs for new ventures. The company plans to assemble a war chest of around $30bn to back projects including an investment in ChatGPT creator OpenAI.
