Wedoany.com Report-Nov. 12, SoftBank Group’s $5.8 billion sale of its Nvidia stake triggered volatility in global markets on Tuesday, raising concerns that the strong momentum around artificial intelligence may be reaching its peak. The Japanese technology conglomerate (9984.T) disclosed in its quarterly results that it had sold all 32.1 million Nvidia shares in October to support CEO Masayoshi Son’s extensive AI strategy, centered on investments in OpenAI, the developer of ChatGPT.

The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017.

SoftBank said the proceeds will help finance projects such as the $500 billion Stargate initiative to expand U.S. data center capacity and up to $40 billion in funding for OpenAI, though detailed financing arrangements were not disclosed. The timing of the sale, however, fueled investor uncertainty about high valuations in the AI sector and whether they are sustainable.

Nvidia’s (NVDA.O) shares fell more than 2% in early trading, dragging down the benchmark S&P 500 index. Market sentiment was further affected by a revenue forecast cut from AI cloud provider CoreWeave, which dropped 9% after a contract delay. Recent remarks from major financial leaders, including the CEOs of Morgan Stanley and Goldman Sachs, who warned of potential market corrections, and hedge fund manager Michael Burry’s short positions against Nvidia and Palantir, have also contributed to speculation about a possible AI market bubble.

Some analysts viewed SoftBank’s sale as a signal that Son, known for his bold technology bets, may believe the rapid rise in AI valuations is stabilizing. Nvidia’s market value recently reached $5 trillion after a surge of more than 1,200% over three years. However, others noted SoftBank’s uneven history with Nvidia shares, pointing out that the company missed out on over $100 billion in gains after selling its holdings in 2019 before the AI boom, only to repurchase shares later.

OpenAI, which recently signed a $38 billion deal to acquire cloud services from Amazon, remains central to Son’s investment strategy. “As for timing, cannot say Masayoshi Son has been great with his trading of Nvidia shares,” said C. J. Muse, senior managing director at Cantor Fitzgerald. “It appears simply resource allocation – finding funds to make bets elsewhere.”

Alongside Nvidia, SoftBank also sold about $9.2 billion worth of shares in T-Mobile (TMUS.O), strengthening its liquidity to invest in AI infrastructure projects. “By cashing in now, he’s securing the capital needed to double down on his conviction in AI applications and the large-scale infrastructure behind them—OpenAI, Oracle, and the Stargate project,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.

SoftBank’s rising focus on OpenAI comes as the startup’s valuation increases sharply. OpenAI is considering a $1 trillion public listing as early as next year, which could yield substantial returns for investors such as Microsoft and SoftBank. The company expects to close the year with $20 billion in annual recurring revenue but has not specified how it will fund its $1.4 trillion in AI infrastructure commitments.

SoftBank’s stock has more than doubled this year, driven by optimism around its AI exposure. However, Schulman noted: “The Vision Fund’s checkered past certainly lends an air of high-stakes poker to this divestment.”