SoftBank’s $5.8 Billion Nvidia Exit Fuels AI Bubble Concerns
SoftBank has shaken global markets with its $5.8 billion sale of Nvidia shares. The move has stirred fears that the artificial intelligence (AI) boom may be cooling. This comes just weeks after top Wall Street figures warned of possible overvaluation in tech stocks.
The Japanese tech group revealed it sold all 32.1 million Nvidia shares in October. The sale aims to fund CEO Masayoshi Son’s ambitious AI projects, including heavy investment in OpenAI and a massive U.S. data center expansion.
Funding AI Dreams
SoftBank plans to use the proceeds to support the $500 billion Stargate initiative. The project will expand AI infrastructure across the U.S. The firm has also pledged around $40 billion to OpenAI, although details of that deal remain private.
However, the timing of the sale raised eyebrows among investors. Nvidia’s stock slipped 1.7% in premarket trading after the announcement, dragging broader U.S. market futures lower. At the same time, AI cloud provider CoreWeave reported a revenue forecast cut, sending its shares down 7%.
Signs of an AI Bubble
Market concerns have been building for weeks. CEOs at Morgan Stanley and Goldman Sachs have warned that tech stocks could face a sharp correction. Michael Burry, the investor famous for predicting the 2008 housing crash, has reportedly bet against Nvidia and Palantir.
Some analysts believe SoftBank’s move signals Son’s view that AI valuations have overheated. Nvidia recently became the world’s first $5 trillion company after soaring 1,200% in three years. However, others see the sale as part of Son’s broader resource reallocation strategy rather than a sign of fading confidence.
Lessons from the Past
SoftBank’s history with Nvidia has been mixed. It previously sold its stake in 2019, missing out on a rally worth over $100 billion. It later repurchased shares before the recent AI surge.
According to Cantor Fitzgerald’s C.J. Muse, “Masayoshi Son’s Nvidia trades show a pattern of resource balancing, not perfect timing.” Despite criticism, Son continues to pursue bold AI bets, aiming to shape the next era of technology.
