Softbank has sold its entire £4.4billion stake in Nvidia – stoking fears that a stock market bubble driven by excitement over artificial intelligence (AI) is about to burst.
The Japanese technology investor has sold all its 32.1m shares in the US chipmaker amid growing anxiety over sky-high valuations and the prospect of a crash back down to earth.
In comments that may worry investors, Softbank finance chief Yoshimitsu Goto admitted: ‘I can’t say if we’re in an AI bubble or not.’
Analysts said the sale suggests Softbank chief executive Masayoshi Son – one of tech’s most audacious investors – sees the rally that saw Nvidia become the world’s first $5 trillion company last month running out of steam.
Nvidia shares fell 3 per cent in New York last night, though it is still valued at around $4.7 trillion with the shares doubling since April and rising more than tenfold in three years.
AI jitters: Softbank, led by chief exec Masayoshi Son ( pictured ), has sold its entire £4.4bn stake in Nvidia amid growing anxiety over sky-high valuations
Softbank said that the sale was required to bankroll fresh AI investments and Son’s ‘all in’ bet on the ChatGPT creator OpenAI.
‘This year our investment in OpenAI is large – more than $30billion needs to be made – so for that we do need to divest our existing portfolios,’ said Goto.
‘We did not have a specific reason to sell and it was nothing to do with Nvidia itself.’
Concerns about an AI bubble have risen in recent weeks, with the bosses of investment banking giants Goldman Sachs, JP Morgan Chase and Morgan Stanley warning a correction may be coming.
Hedge fund manager Michael Burry, whose bets against the US housing market ahead of the 2008 financial crash were famously depicted in the film The Big Short, has wagered £835million against Nvidia and Palantir.
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