SoftBank's High-Stakes AI Bet: Is Selling Nvidia to Fund OpenAI a Masterstroke or a Gamble?

SoftBank Group's decision to liquidate its $5.8 billion stake in Nvidia in October 2024 has reignited debates about the wisdom of its aggressive reallocation of capital toward artificial intelligence (AI) infrastructure and OpenAI. This move, part of a broader $30 billion commitment to the AI pioneer, underscores CEO Masayoshi Son's belief in the transformative potential of AI. Yet, as SoftBank's stock has plummeted 40% since October 2025 amid investor skepticism, the question remains: Is this a visionary pivot or a precarious gamble?

Strategic Reallocation: From Chips to AI Ecosystems

SoftBank's exit from Nvidia marks its second full divestment from the chipmaker, having previously sold a $3.6 billion stake in 2019 before re-entering in 2020 according to Bloomberg. The rationale is clear: Nvidia's dominance in AI hardware has already been capitalized on, while OpenAI represents a bet on the next phase of AI's evolution-large-scale infrastructure and enterprise solutions. By selling its Nvidia shares, SoftBank has funded a $3 billion investment in an Ohio factory to produce modular data center units for OpenAI's upcoming facilities, part of the $500 billion Stargate Project joint venture with Oracle. This infrastructure push aims to create a nationwide AI network, positioning SoftBank as a key enabler of OpenAI's ambitions.

The firm has also launched SB OAI Japan, a joint venture to commercialize "Crystal intelligence", an enterprise AI tool, by 2026. These moves reflect a strategic pivot from financing hardware providers to directly shaping the AI ecosystem. As Son stated, the risk of "not investing in AI is far greater than the risk of investing", a sentiment that aligns with his long-term vision of AI-driven economic transformation.

The Risks of a High-Valuation Play

However, the scale of SoftBank's bets raises critical questions. OpenAI, despite its $500 billion valuation, is projected to remain unprofitable until 2028, and its dominance faces growing challenges from rivals like Alphabet's Gemini 3.0. Meanwhile, the Stargate Project and other AI infrastructure initiatives have already required $100 billion in debt financing, signaling the immense capital intensity of scaling AI operations.

Investor concerns are further amplified by SoftBank's own financial trajectory. The firm's stock has lost 40% of its value since October 2025, reflecting fears that its AI investments may not yield returns for years-or at all. Son's personal stake in the gamble is equally stark: he has fallen out of the ranks of Asia's top three wealthiest individuals following the Nvidia sale.

Balancing Vision and Viability

The success of SoftBank's strategy hinges on two factors: OpenAI's ability to maintain its technological edge and the broader AI industry's capacity to deliver scalable returns. While the firm's investments in Ampere Computing and Intel suggest a diversified approach to AI hardware and semiconductors, these moves also highlight the complexity of building a cohesive ecosystem.

Critics argue that SoftBank's reliance on OpenAI-a private company with no track record of profitability-exposes it to valuation volatility and regulatory scrutiny. Yet, proponents counter that the firm's early bets on transformative technologies (e.g., Alibaba, WeWork) have historically paid off, albeit with significant short-term pain.

Conclusion: A Gamble with Long-Term Potential

SoftBank's AI reallocation is neither a masterstroke nor a reckless gamble-it is a high-risk, high-reward bet on the future of technology. The firm's willingness to liquidate long-held assets for speculative but potentially revolutionary ventures reflects Son's enduring optimism. However, the market's 40% correction in SoftBank's stock underscores the fragility of such bets in an era of AI hype and uncertainty.

For investors, the key takeaway is that SoftBank's strategy demands patience. If OpenAI and the Stargate Project deliver on their promises, the returns could be astronomical. But if the AI boom falters, SoftBank's balance sheet-and Son's legacy-may bear the cost.