SoftBank sells stake in Nvidia for $5.8bn as it doubles down on OpenAI bets
The Japanese technology investor SoftBank intensified the debate about valuations in the artificial intelligence world on Tuesday by revealing it had sold its stake in the chipmaker Nvidia,In its latest quarterly results, SoftBank showed it had sold its shares in Nvidia for $5,8bn (£4,4bn) in October, as it doubles down on its bets on OpenAI, the group behind the ChatGPT chatbot,It also reported that second-quarter net profit more than doubled to 2.
5tn yen (£12.2bn), driven by valuation gains in its OpenAI holdings.SoftBank also sold part of its stake in T-Mobile, as it assembled funds to bankroll its AI investments.Asked about the timing of the sale of the Nvidia stake, the chief financial officer, Yoshimitsu Goto, told reporters that because SoftBank’s investment in OpenAI was very substantial, the company had to use its existing assets to finance new investments.“This year our investment in OpenAI is large – more than $30bn needs to be made – so for that we do need to divest our existing portfolios,” Goto said.
“We did not have a specific [reason to sell] in October and it was nothing to do with Nvidia itself,”Shares in Nvidia, whose high-powered chips are in hot demand to power AI datacentres, fell by 3,5% in morning trading in New York after SoftBank’s announcement,Other tech shares also slipped, pulling the Nasdaq Composite index down by 0,85% in early trading.
Arm, the Cambridge-based chip designer, fell 5,1%, as did the computer memory and storage developer Micron,Russ Mould, the investment director at AJ Bell, said: “People are looking for clues that the tech rally is close to the top, and SoftBank’s profit-taking in the chip giant is significant,“Investors typically sell out of positions when they believe the valuation is too rich, the growth prospects for the company are less attractive than before, or they’ve found something better to back and need cash to make that investment,”Nvidia’s market value had soared during 2024 and 2025, helping to fuel concerns in recent months that an AI bubble was forming.
At the end of October it became the world’s first $5tn company but has since fallen back from that high.Mould suggested SoftBank had topped up its war chest for the next wave of AI-related investments by cashing in its stake in Nvidia.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotion“Nvidia has had a storming run on the markets and SoftBank might think it is prudent to cash in while the going is good.“Nvidia’s role in an AI world is already well known, yet OpenAI’s position is still evolving, so it might simply be that SoftBank sees the latter as a better way of profiting from the tech explosion going forward, rather than sticking with yesterday’s trailblazer.“What’s important for markets is the fact that SoftBank’s exit from Nvidia isn’t the Japanese group washing its hands completely of all things AI,” Mould said.
Datacenters meet resistance over environmental concerns as AI boom spreads in Latin America
This Q&A originally appeared as part of The Guardian’s TechScape newsletter. Sign up for this weekly newsletter here.The datacenters that power the artificial intelligence boom are beyond enormous. Their financials, their physical scale, and the amount of information contained within are so massive that the idea of stopping their construction can seem like opposing an avalanche in progress.Despite the scale and momentum of the explosion of datacenters, resistance is mounting in the United States, in the United Kingdom, and in Latin America, where datacenters have been built in some of the world’s driest areas
Can OpenAI keep pace with industry’s soaring costs?
It is the $1.4tn (£1.1tn) question. How can a loss-making startup such as OpenAI afford such a staggering spending commitment?Answer that positively and it will go a long way to easing investor concerns over bubble warnings in the artificial intelligence boom, from lofty tech company valuations to a mooted $3tn global spend on datacentres.The company behind ChatGPT needs a vast amount of computing power – or compute, in tech jargon – to train its models, produce their responses and build even more powerful systems in the future
Tech giants vow to defend users in US as spyware companies make inroads with Trump administration
Apple and WhatsApp have vowed to keep warning users if their mobile phones are targeted by governments using hacking software against them, including in the US, as two spyware makers seek to make inroads with the Trump administration.The two technology giants made their statements in response to queries from the Guardian as the two cyberweapons makers – both founded in Israel and now owned by American investors – are aggressively pursuing access to the US market.Paragon Solutions, which makes a spyware called Graphite, already cemented a deal with the Trump administration in September to give US immigration agents access to one of the world’s most sophisticated hacking tools, after the Department of Homeland lifted a freeze on a $2m contract with ICE (Immigration and Customs Enforcement).Paragon did not respond to requests for comment.Another company, NSO Group, which was accused by the Biden administration in 2021 of engaging in business that was “contrary to the national security or foreign policy interests of the US”, announced this weekend that David Friedman, the US ambassador to Israel during Donald Trump’s first term, had agreed to become executive chairman of the holding company that owns NSO
Elon Musk makes himself far-right fixture after White House departure
The Tesla CEO once hinted he was done with politics – but he’s been leaning further into the international far rightWhen the far-right activist Tommy Robinson emerged from a London courtroom this week after a judge cleared him of a terrorism charge, he gave thanks to the man he said had bankrolled his defense.“Elon Musk, I’m forever grateful. If you didn’t step in and fund my legal fight I’d probably be in jail,” Robinson said. “Thank you, Elon.”In the period immediately after Musk’s messy departure from the White House, the Tesla CEO repeatedly suggested that he was done with politics
ChatGPT accused of acting as ‘suicide coach’ in series of US lawsuits
ChatGPT has been accused of acting as a “suicide coach” in a series of lawsuits filed this week in California alleging that interactions with the chatbot led to severe mental breakdowns and several deaths.The seven lawsuits include allegations of wrongful death, assisted suicide, involuntary manslaughter, negligence and product liability.Each of the seven plaintiffs initially used ChatGPT for “general help with schoolwork, research, writing, recipes, work, or spiritual guidance”, according to a joint statement from the Social Media Victims Law Center and Tech Justice Law Project, which filed the lawsuits in California on Thursday.Over time, however, the chatbot “evolved into a psychologically manipulative presence, positioning itself as a confidant and emotional support”, the groups said.“Rather than guiding people toward professional help when they needed it ChatGPT reinforced harmful delusions, and, in some cases, acted as a ‘suicide coach’
‘Musk is Tesla and Tesla is Musk’ – why investors are happy to pay him $1tn
For all the headlines about an on-off relationship with Donald Trump, baiting liberals and erratic behaviour, Tesla shareholders are loath to part with Elon Musk.Investors in the electric vehicle maker voted on Thursday to put the world’s richest person on the path to become the world’s first trillionaire, despite the controversy that is now seemingly intrinsic to his public profile.Shareholders approved the $1tn compensation plan, which could yield the largest corporate payout in history if he meets a series of tough-looking goals, not least pushing Tesla from its current market value of $1.4tn to $8.5tn (£1
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