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The ‘Warren Buffett of Japan’ just made a $9 billion bet
SoftBank’s sale of its Nvidia stake and holdings in two telcos says something about the shifting nature of investment flows within the artificial intelligence industry. It also says something about how the insatiable demand for capital to fund the industry might test the limits of financial markets’ capacity to supply it.
Japan’s SoftBank cashed out its $US5.8 billion ($8.9 billion) holding in Nvidia and has raised more than $US11 billion from the sale of shares in T-Mobile and Deutsche Telekom to help fund a $US30 billion investment in OpenAI and its share of the $US500 billion Stargate data centres joint venture with OpenAI and Oracle.
Masayoshi Son’s Softbank has more than $US300 billion of assets, but its commitments to OpenAI and Stargate and a $US1 trillion AI and robotics manufacturing hub in Arizona are stressing its financial capacity and liquidity.Credit: Bloomberg
It wasn’t a loss of faith in Nvidia, the $US4.7 trillion chipmaker at the centre of the AI boom, that prompted the sales, but the need to raise the funding for the financial commitments SoftBank’s Masayoshi Son, who is nicknamed “The Warren Buffett of Japan”, has made to OpenAI and the Stargate joint venture, among other AI-related investments.
In exchanging an exposure to Nvidia, whose chips dominate the sector, for roughly 11 per cent of OpenAI, Softbank is also moving from an exposure to the “picks and shovels” supplier to the boom to the potentially more lucrative, but far riskier, more entrepreneurial research and development end of the sector, one with hefty capital expenditure requirements to train the large language models and develop the massive data centres that enable deployment of AI.
Softbank has more than $US300 billion of assets, but its commitments to OpenAI and Stargate and a $US1 trillion AI and robotics manufacturing hub in Arizona are stressing its financial capacity and liquidity. It has AI-related investment commitments of well over $US100 billion and Son has ambitions for an even bigger exposure........
© The Sydney Morning Herald
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