SoftBank Takes $4 Billion Stake in U.S. Chipmaker Nvidia, Sources SayBy
Stake represents 4.9 percent of total outstanding shares
Holding seen moving into SoftBank’s $93 Billion Vision Fund
SoftBank Group Corp. has quietly amassed a $4 billion stake in Nvidia Corp. making it the fourth-largest shareholder in the graphics chipmaker, according to people familiar with the situation.
The Japanese company, which just closed its Vision Fund, disclosed it owned an unspecified amount of Nvidia stock when it announced $93 billion of commitments to the technology investment fund on Saturday. A holding of 4.9 percent, just under the amount that would require a regulatory disclosure in the U.S., would be worth about $4 billion.
A stake in Nvidia fits with SoftBank founder Masayoshi Son’s plans to become the biggest investor in technology over the next decade, with bets on emerging trends such as artificial intelligence. Under its founder, Jen-Hsun Huang, Nvidia has become one of the leaders of the charge by chipmakers to provide the underpinnings of machine intelligence in everything from data centers to automobiles.
SoftBank spokesman Matthew Nicholson declined to comment. In announcing the Vision Fund’s capital commitments, SoftBank said the fund will have the right to acquire several investments including its Nvidia stake.
SoftBank shares reversed losses and closed mostly unchanged on the news. Nvidia shares rose as much as 3 percent in New York Wednesday to an intraday record high of $141.07.
Depending on when the shares were acquired, Son may have made a savvy wager. Nvidia’s stock tripled last year and is up 28 percent again this year, giving the company a market value of more than $80 billion. Its worst annual gain since it started rallying in 2013, was the 25 percent run up achieved in 2014.
Nvidia, which is the biggest maker of graphics chips used by computer gamers, earlier this month countered concern among analysts that its share price appreciation had outrun its ability to grow profit by reporting earnings that beat estimates and forecasting a further improvement. The results showed that gains are being driven by progress expanding into new markets, such as automotive and data centers.
Son set up the planned $100 billion Vision Fund so he can pursue even more ambitious deals than he’s been able to do on his own. He has invested in startups in China, India and the U.S. and acquired control of larger companies such as U.K. chipmaker ARM Holdings Plc and U.S. wireless operator Sprint Corp.
SoftBank invested $5 billion into the Chinese ride-hailing giant Didi Chuxing last month in the largest-ever venture fundraising. This month, the Japanese company put $1.4 billion into the digital payments startup Paytm in the largest funding round from a single investor in India’s technology sector.
Son has made the U.S. a particular focus after meeting with President Donald Trump in December and pledging to create 50,000 new jobs in by investing $50 billion in startups and new companies. That month, SoftBank contributed $1 billion to a funding round in OneWeb Ltd., a satellite startup based at Exploration Park, Florida near Kennedy Space Center. In March, SoftBank invested $300 million in WeWork Cos., a U.S. startup that rents out office space and desks to small businesses and freelancers.
— With assistance by Pavel Alpeyev