SoftBank’s $5.8 Billion Nvidia Exit Sparks Fears of an AI Market Reckoning

In a move that sent tremors through global markets, SoftBank Group Corp. confirmed it has sold its entire $5.8 billion stake in Nvidia, deepening investor anxiety that the artificial intelligence boom may be reaching its speculative limits.
The sale, disclosed Tuesday in the company’s quarterly earnings, marks another high-stakes pivot by SoftBank founder Masayoshi Son, who is using the proceeds to fund a sweeping expansion into AI infrastructure — including a proposed $500 billion “Stargate” data center project and billions more in commitments to OpenAI, the creator of ChatGPT.
While Son has described the moment as his “all-in bet on AI,” markets saw it differently. Shares of Nvidia — long the symbol of the AI revolution — fell over 3%, dragging down the Nasdaq and S&P 500’s tech-heavy segments. The sale immediately revived fears that the sector’s valuations, driven more by momentum than by earnings, may be nearing a correction.
A Strategic Exit — or a Warning Sign
SoftBank’s divestment comes at a symbolic moment: Nvidia’s market capitalization, having briefly surpassed $5 trillion last month, has embodied investor faith in AI’s limitless potential. Yet Son’s decision to cash out — after missing much of Nvidia’s earlier rally in 2019 — is fueling speculation that one of the industry’s most daring visionaries now sees overheating risks.
“Masayoshi Son has a history of bold, binary bets,” said C.J. Muse, senior managing director at Cantor Fitzgerald. “This looks less like panic and more like repositioning — reallocating resources for the next AI phase. Still, the timing sends a message.”
That message landed amid growing skepticism from Wall Street titans. Both Morgan Stanley and Goldman Sachs have recently warned of an AI “valuation drawdown,” while famed short-seller Michael Burry has publicly wagered against Nvidia and other high-flying AI stocks.
Adding to the jitters, CoreWeave, a cloud computing firm backed by Nvidia, slashed its revenue forecasts after reporting data center delays — triggering a double-digit plunge in its share price and reinforcing fears of a near-term AI cooldown.
SoftBank’s Cash Hunt
For Son, the Nvidia sale is as much about liquidity as strategy. SoftBank also offloaded $9.2 billion worth of T-Mobile shares, creating a war chest estimated at $15 billion or more to finance what Son calls “the infrastructure for artificial general intelligence.”
The group’s most ambitious venture is Stargate, a mega-project aimed at expanding data-center capacity across the U.S. to support next-generation AI systems. SoftBank has also pledged up to $40 billion in potential funding to OpenAI, positioning itself as a central backer of the company’s expansion beyond its nonprofit origins.
“By cashing in now, Son secures the capital needed to double down on AI applications and the super-scaled infrastructure behind them,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors. “It’s high-risk, but consistent with his vision of AI as a global utility.”
A Gamble with History
SoftBank’s Vision Fund, once the face of global tech exuberance, suffered colossal losses during the post-pandemic tech rout, writing down billions in startups from WeWork to Zume. The group’s recovery this year — with its stock more than doubling — has been powered largely by renewed exposure to AI and OpenAI’s surging valuation.
OpenAI’s restructuring in October, which freed it from its non-profit constraints, ignited speculation of a $1 trillion IPO as early as next year, potentially rewarding early investors like Microsoft and SoftBank.
But the startup’s financial structure remains opaque. OpenAI has disclosed more than $1.4 trillion in planned AI infrastructure commitments, with no clear explanation of how they will be financed. Son’s investments could tie SoftBank’s fortunes directly to OpenAI’s ability to sustain its extraordinary momentum.
“The Vision Fund’s checkered past lends an air of high-stakes poker to this divestment,” Schulman added. “SoftBank is betting that OpenAI will not just lead — but monetize — the next phase of artificial intelligence.”
The Broader Market Message
The Nvidia sale underscores a growing split between enthusiasm and realism in the AI economy. Nvidia’s three-year, 1,200% rally has minted fortunes and fueled record corporate investment, yet many analysts argue the sector’s fundamentals have not caught up with its valuations.
For investors, the signal from SoftBank is unmistakable: if one of tech’s boldest evangelists is trimming exposure, it may be time to reprice expectations.
Still, Son remains unshaken. “This is not the end of the AI boom,” one SoftBank insider said. “It’s the consolidation before the next explosion.”
Whether that next explosion yields innovation or implosion may define not just the fate of SoftBank, but the future of the global AI economy itself.