SoftBank Group, the Japanese technology investor, sold its entire stake in AI chip giant Nvidia for $5.8 billion in October. The move, announced on November 11, immediately rattled stock markets and intensified fears that the booming artificial intelligence sector might be experiencing an investment bubble^[1][2][3][4]. Nvidia's shares slid 3% in US trading on November 11 following the news, while SoftBank's stock plunged as much as 10% in Tokyo trading the next day^[1][3]. ### SoftBank's Strategic Shift to OpenAI SoftBank stated the sale was a strategic decision to reallocate capital. The company plans to bankroll CEO Masayoshi Son's aggressive "all-in" push into new AI ventures, primarily focusing on ChatGPT creator OpenAI^{[1][5][2][4][6]}. SoftBank has pledged as much as $40 billion in funding to OpenAI, with about $30 billion expected this year^[2][6][7][8]. These funds will also support initiatives like the $500 billion Stargate project, aimed at expanding US data center capacity for AI^{[1][2][4][7][9][8]}. SoftBank's Chief Financial Officer Yoshimitsu Goto explained the company needed to use existing assets to finance its substantial investments in OpenAI. "This year our investment in OpenAI is large – more than $30 billion needs to be made – so for that we do need to divest our existing portfolios," Goto told reporters. He^[3] added that the sale was "nothing to do with Nvidia itself," and SoftBank aimed to "take advantage of its gains". Go^[5][3]to also noted that while opinions vary on an AI bubble, SoftBank believes the risk of not investing in AI is far greater than the risk of investing. #^[8]## Market Jitters and Overheated Valuations Despite SoftBank's explanations, the timing of the sale deepened investor doubts about whether valuations in the AI industry have outpaced fundamental growth. Nv^{[1][2][4][7][9]}idia's shares had soared, tripling in value over the past two years and surging more than 1,200% in three years. Th^[5][2][4][9]e chipmaker even became the first company to cross a $5 trillion valuation in October, shortly before SoftBank's exit. C^{[2][3][4][8][10]}oncerns about an "AI bubble" have grown louder in recent weeks. Top executives from Wall Street banks like Morgan Stanley and Goldman Sachs warned that equities could be heading for a drawdown. Fa^{[1][2][4][7][11][9]}med hedge fund manager Michael Burry, known for predicting the 2008 housing crash, also reportedly bet against Nvidia and Palantir. Fu^[2][4][7][9]rther adding to market jitters was a revenue forecast cut from AI cloud provider CoreWeave due to a contract delay, which sent its stock down 9%. A^{[1][2][4][7][9]}nalysts widely interpreted SoftBank's complete exit as a signal that even audacious investors like Masayoshi Son see the blistering rally in Nvidia cooling. Ru^[2][4][9]ss Mould, Investment Director at AJ Bell, noted that investors "are looking for clues that the tech rally is close to the top". He^[3][8] added that "funds move when corporate value seems excessive or when more promising investments emerge". #^[3][8]## SoftBank's Mixed Investment History Some market observers also highlighted SoftBank's inconsistent record with its Nvidia holdings. By some estimates, SoftBank missed out on a more than $100 billion rally in Nvidia shares by selling them off in 2019, before the current AI boom truly took hold. It^{[1][2][4][6][9][10]} later bought the chipmaker's shares again. C.^[1][2][4][9]J. Muse, Senior Managing Director at Cantor Fitzgerald, commented, "As for timing, cannot say Masayoshi Son has been great with his trading of Nvidia shares. It appears simply resource allocation – finding funds to make bets elsewhere". How^[1][2][4]ever, Michael Ashley Schulman, Chief Investment Officer at Running Point Capital Advisors, offered a different perspective. He suggested that by selling now, Son is "securing the capital needed to double down on his conviction in AI applications and the super-scaled infrastructure behind them, OpenAI, Oracle and the Stargate project". This^[1] view suggests a strategic rotation rather than a complete retreat from AI, shifting focus from hardware to broader AI ecosystem players like platforms, software, and infrastructure. The^[5][12] sale underscores a critical debate in the tech world: whether the rapid ascent of AI-related companies represents sustainable growth or an overheated market nearing a correction. SoftBank's move provides a substantial war chest for its new AI endeavors, but it leaves many investors questioning the long-term trajectory of current AI valuations.

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