SoftBank's CEO admits to difficulty in dumping Nvidia for OpenAI in October

SoftBank Group’s billionaire chief Masayoshi Son finally broke his silence Monday about his company’s decision to dump its entire holdings in Nvidia, the world’s top chipmaker. Speaking at a business conference in Tokyo, the 68-year-old executive made it clear: he didn’t want to let go of even one share, but needed cash for bigger plans.

“I was crying to sell Nvidia shares,” Son told attendees at the FII Priority Asia forum. The reason? SoftBank needed money to pour into OpenAI and several other artificial intelligence ventures, including building massive data centers.

Son took direct aim at critics who claim too much money is flowing into AI, as quoted by Bloomberg. He called such people “not smart enough” and defended the spending spree. According to his math, if AI eventually captures just 10% of the world’s total economic output down the road, even trillions spent now would pay off. “Where is the bubble?” he asked.

The Tokyo event drew heavy hitters, including Prime Minister Sanae Takaichi and top government finance officials, highlighting closer cooperation between Japan and Saudi Arabia.

Son’s original Vision Fund got $45 billion from Saudi Arabia’s Public Investment Fund, which has put roughly $11.5 billion into Japan between 2017 and 2024. That figure should hit around $27 billion by 2030, according to PIF Governor Yasir Al-Rumayyan.

$5.8 billion Nvidia exit fueled record profits

Earlier disclosures showed SoftBank unloaded 32.1 million Nvidia shares during October, bringing in $5.8 billion, as reported by Cryptopolitan earlier. The sale came to light when the company released second-quarter earnings figures showing profits had more than doubled to 2.5 trillion yen, about $16.6 billion.

That marked SoftBank’s strongest three-month period since the summer of 2022, boosted mainly by paper gains on its OpenAI investment worth 2.16 trillion yen for the quarter.

This isn’t the first time SoftBank walked away from Nvidia. Back in 2019, the firm sold off a $3.6 billion stake, then bought back in during 2020 before this latest exit. That earlier move haunts the company; those original shares would now be valued at north of $150 billion if held.

During an earnings discussion, SoftBank’s finance chief Yoshimitsu Goto shed light on why the company needed the money. “This year our investment in OpenAI is large, more than $30 billion needs to be made,” Goto said. “For that, we do need to divest our existing assets.”

Goto stressed the October sale timing wasn’t meant to signal anything special about Nvidia’s prospects. He described it as normal business for SoftBank, which constantly moves money around, selling some holdings to fund new ones. He emphasized the decision had “nothing to do with Nvidia itself.”

Massive asset sale to fund AI push

SoftBank’s commitment to OpenAI has expanded dramatically recently. Last March, the company agreed to lead a funding round reaching up to $40 billion, valuing OpenAI at $300 billion. The deal involved an initial $10 billion payment in April, followed by as much as $30 billion in December. SoftBank plans to bring in other investors for $10 billion, leaving its own total at $30 billion.

In October, SoftBank’s board approved another $22.5 billion installment, but with strings attached—OpenAI must finish restructuring its business to allow going public someday. If that doesn’t happen by year’s end, SoftBank’s total drops to $20 billion. By late December, SoftBank expects to have $34.7 billion invested in OpenAI.

OpenAI’s worth has skyrocketed from $157 billion last October to $300 billion in March, then jumped to $500 billion after employees sold shares last month. As reported by Cryptopolitan, that makes it the priciest private company anywhere, even bigger than Elon Musk’s SpaceX.

To fund the OpenAI deal, SoftBank has been selling off other investments, including $9.17 billion worth of T-Mobile stock between June and September. The company also issued bonds, took out bridge loans, and expanded a margin loan backed by Arm Holdings shares from $13.5 billion to $20 billion.

Progress on Stargate has lagged expectations. Goto admitted in September that getting all partners, including Oracle and Abu Dhabi’s MGX, on the same page takes time.

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