SoftBank doubles down on AI amid warnings from ‘Big Short’ investor
Jensen Huang, left, co-founder and chief executive officer of Nvidia Corp., and Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., during a fireside chat at the Nvidia AI Summit Japan on Wednesday, Nov. 13, 2024, in Tokyo, Japan.
Akio Kon | Bloomberg | Getty Images
SoftBank sells all its shares Nvidia – but not for the reasons you might think.
In its earnings statement released Tuesday, the Japanese group said it sold 32.1 million Nvidia shares in October for $5.83 billion.
At first glance, this could be read as a sign that Nvidia’s high valuations are causing discomfort at SoftBank. If SoftBank, which poured $18.5 billion into WeWork and eventually valued it at $2.9 billion, is suppressing its usual optimism about its investments, retail investors should probably pay attention.
Adding to such concerns are comments about major AI companies by Michael Burry, who bet against subprime mortgages before they caused a full-blown financial crisis in 2008.
Burry wrote on Monday: Publish on X He said these firms were understating the “depreciation” of artificial intelligence chips, which “is one of the most common scams of the modern era that artificially boosts earnings.” CNBC could not independently verify that companies were implementing this.
But that doesn’t seem to be SoftBank’s concern. A person familiar with the group’s sale told CNBC it had nothing to do with AI valuations. By contrast, cash from offloading Nvidia chips will be directed toward SoftBank’s $22.5 billion investment in OpenAI, the person said.
In his post, Burry said he would announce “more details” on November 25 and encouraged readers to “stay tuned.” That may not be enough appeal for SoftBank CEO Masayoshi Son.
— CNBC’s Yun Li, April Roach and Dylan Butts contributed to this report.
