SoftBank's Bold AI Gambit: Reclaiming the Semiconductor Throne with Nvidia and TSMC Investments

SoftBank Group is reinforcing its commitment to the artificial intelligence industry by substantially increasing its investments in Nvidia and TSMC. This strategy from CEO Masayoshi Son underscores a focus on essential tools and hardware required for AI development.

Regulatory filings reveal that SoftBank's stake in Nvidia rose to around $3 billion by the end of March, up from $1 billion in the previous quarter. Simultaneously, SoftBank acquired approximately $330 million worth of TSMC shares and $170 million in Oracle shares.

While SoftBank's latest holdings are pending disclosure in the June report, analysts suggest that Son's recent moves might compensate for missing significant gains following ChatGPT’s AI surge—one of the most substantial growth phases in history. Despite an early AI bet, SoftBank sold its 4.9% Nvidia stake in early 2019, now valued over $200 billion.

Financial constraints from Vision Fund's losses curtailed SoftBank's potential as an early investor in generative AI. Consequently, repurchasing Nvidia shares and acquiring TSMC stock are strategic moves to reclaim positions in lucrative segments of the semiconductor supply chain.

These initiatives align with Son's larger ambitions to play a central role in AI expansion through major collaborations, such as a $500 billion Stargate data center project with OpenAI, and lobbying TSMC and others for a proposed $1 trillion AI manufacturing center in Arizona.

Arm, the UK-based chip design company, remains central to SoftBank’s AI ambitions. Son aims to construct a strategic investment portfolio with key industry players, compensating for missed historic market gains. This AI boom propelled Nvidia’s market cap to $4 trillion and TSMC near $1 trillion.

Richard Kaye, Co-Head of Japanese Equity Strategies at Comgest Asset Management and a long-term investor in SoftBank, noted that Arm's intellectual property supports most mobile chips and increasingly server chips, positioning SoftBank distinctively without manufacturing requirements.

In June, Son informed shareholders of SoftBank's relentless pursuit of AI as a top-tier platform company. Moreover, Vision Fund reportedly liquidated close to $2 billion in market assets by the first half of 2025, prioritizing investment returns without specific divestment pressure.