SoftBank takes up stake in Nvidia
SAN FRANCISCO: SoftBank Group Corp has quietly amassed a US$4bil 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 US$93bil of commitments to the technology investment fund on Saturday.
A holding of 4.9%, just under the amount that would require a regulatory disclosure in the US, would be worth about US$4bil.
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 centres to automobiles.
SoftBank spokesman Matthew Nicholson declined to comment. In announcing the Vision Fund’s capital commitments, SoftBank said the fund would have the right to acquire several investments including its Nvidia stake.
Depending on when the shares were acquired, Son may have made a savvy wager. Nvidia’s stock tripled last year and is up 28% again this year, giving the company a market value of more than US$80bil. Its worst annual gain since it started rallying in 2013, was the 25% 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 centres.
Son set up the planned US$100bil Vision Fund so he can pursue even more ambitious deals than he’s been able to do on his own.
He has invested in start-ups in China, India and the US and acquired control of larger companies such as UK chipmaker ARM Holdings Plc and US wireless operator Sprint Corp.
SoftBank invested US$5bil into the Chinese ride-hailing giant Didi Chuxing last month in the largest-ever venture fundraising.
This month, the Japanese company put US$1.4bil into the digital payments start-up Paytm in the largest funding round from a single investor in India’s technology sector.
Son has made the US a particular focus after meeting with President Donald Trump in December and pledging to create 50,000 new jobs in by investing US$50bil in start-ups and new companies.
That month, SoftBank contributed US$1bil to a funding round in OneWeb Ltd, a satellite start-up based at Exploration Park, Florida near Kennedy Space Centre.
In March, SoftBank invested US$300mil in WeWork Cos, a US start-up that rents out office space and desks to small businesses and freelancers.