SoftBank's Strategic Pivot: Nvidia Liquidation to Fund $34.7B OpenAI Investment

This analysis is based on recent market developments [0] and comprehensive reporting on SoftBank’s strategic pivot [1][2][3][4]. On November 11, 2025, SoftBank Group announced the complete liquidation of its $5.8 billion Nvidia stake (32.1 million shares) to fund an expanded commitment to OpenAI totaling up to $34.7 billion, representing a fundamental shift in AI investment strategy.

NVDA closed at $193.80 on November 12, 2025, up 0.33% despite the SoftBank announcement [0]. The stock briefly dipped 2% following the news but recovered quickly, demonstrating market resilience. Currently trading 8.7% below its 52-week high of $212.19, Nvidia maintains a $4.72 trillion market cap with a P/E ratio of 55.06 [0]. The stock’s 30-day performance shows a 5% gain with relatively stable volatility at 2.59% [0].

The company reported record Q2 2025 profit of 2.5 trillion yen ($16.6 billion), more than doubling from the previous year [2][4]. OpenAI holdings generated 2.16 trillion yen in investment gains for the quarter, validating the strategic shift [4]. SoftBank’s stock has nearly tripled in 2025, reflecting investor confidence in the AI strategy [4].

The Reddit analysis correctly identifies SoftBank’s strategy as moving up the AI value chain from infrastructure providers (Nvidia - the “shovel maker”) to AI applications and services (OpenAI - the “gold digger”) [1]. This strategic reallocation is based on several key considerations:

SoftBank CFO Yoshimitsu Goto stated, “This year our investment in OpenAI is large, more than $30 billion needs to be made. For that, we do need to divest our existing assets” [4]. The company is positioning itself to capture more value from AI applications rather than just infrastructure.

As the Reddit post notes, OpenAI will likely use SoftBank’s investment to purchase more Nvidia GPUs, creating indirect but potentially more lucrative exposure to AI growth [1]. This creates a symbiotic relationship where SoftBank benefits from both the application layer and continued infrastructure demand.

OpenAI’s valuation has accelerated dramatically: $157 billion (October 2024) → $300 billion (March 2025) → $500 billion (October 2025) [4]. The company is now the world’s most valuable private company, surpassing SpaceX, with annualized revenue expected to exceed $20 billion [2][4].

• Initial $10 billion commitment in April 2025
• Second tranche of $22.5 billion approved in October 2025 (conditional on OpenAI restructuring) [4]
• Total expected investment: $34.7 billion by December 2025 [4]
• Plan to syndicate $10 billion to co-investors, bringing effective exposure to $30 billion [4]

SoftBank is also investing in AI infrastructure through:

• Stargate Project: $500 billion AI infrastructure initiative across the U.S. [4]
• $6.5 billion acquisition of chip designer Ampere Computing [4]
• $5.4 billion acquisition of ABB’s robotics division [4]
• $2 billion stake in Intel for AI chip development [4]

Analyst David Gibson at MST Financial estimates SoftBank has committed approximately $113 billion in investments but possesses funding capacity of only $58.5 billion, creating a $54.5 billion shortfall [4]. This raises significant concerns about the sustainability of SoftBank’s aggressive investment strategy.

SoftBank’s massive bet on a single private company (OpenAI) represents extreme concentration. This marks SoftBank’s second complete exit from Nvidia, following a painful 2019 sale where the original $3.6 billion stake would be worth over $150 billion today [4].

The second tranche of SoftBank’s investment is contingent on OpenAI completing corporate restructuring to enable a future public listing. If this fails by year-end, the total investment would drop to $20 billion [4].

The Stargate Project has encountered delays, with SoftBank conceding that progress is taking longer than anticipated due to the need for consensus among multiple partners [4].

The market’s positive reaction to SoftBank’s strategy (stock nearly tripling in 2025) suggests investor approval of the AI focus [4]. However, the funding gap and concentration risks warrant careful monitoring.

SoftBank’s comprehensive AI strategy, spanning applications (OpenAI), infrastructure (Stargate), and enabling technologies (chip investments), could accelerate AI development across the ecosystem.

This represents a significant evolution from SoftBank’s previous Vision Fund strategy, focusing more narrowly on what CEO Masayoshi Son views as the AI revolution’s core players.

• SoftBank liquidated $5.8 billion Nvidia stake to fund OpenAI investment [0][3]
• Total OpenAI commitment: $34.7 billion by December 2025 [4]
• OpenAI valuation: $500 billion (October 2025) [4]
• SoftBank funding gap: $54.5 billion between commitments and capacity [4]
• Nvidia current price: $193.80, 0.33% up on November 12 [0]

Moving up AI value chain from infrastructure to applications for higher potential returns and strategic positioning in the AI revolution [1][4].

Significant funding shortfall, extreme concentration in OpenAI, conditional investment structure, and historical pattern of premature Nvidia exits [4].

AI sector continues to attract massive capital, with SoftBank’s comprehensive strategy potentially accelerating development but also increasing systemic risk if the strategy fails [2][4].