SoftBank may explore raising stake in Nvidia
Japanese firm says it will work more closely with chipmaker
LONDON: SoftBank Group Corp, the Japanese company that raised a US$93bil fund for technology investments, is considering boosting its stake in chipmaker Nvidia Corp, people familiar with the matter said.
The firm would raise its holding over time and begin to work more closely with Nvidia, the people said, asking not to be identified because the deliberations are private.
“While we don’t comment on rumours about our investments, we consider ourselves long-term partners to companies, whether private or public,” SoftBank said in an e-mailed statement. Nvidia declined to comment.
SoftBank had bought a 4.9% stake, just under the amount that would require a regulatory disclosure in the United States, making it the fourth-largest shareholder in the graphics chipmaker, people familiar with the situation said previously. The holding has a market value of about US$4.1bil.
SoftBank chief executive officer Masayoshi Son is working to become the world’s most prolific technology investor, and closed the first round of capital commitments for his Vision Fund this month. He has used money from his domestic telecom operations to pay for investments in start-ups in China, India and the US and for acquisitions of larger companies such as UK chipmaker ARM Holdings Plc and US wireless operator Sprint Corp.
Microsoft Corp, which uses Nvidia’s graphic chips for its Xbox gaming console, had the right of first refusal to buy the shares if another company tried to take a more than 30% stake, Nvidia has said in regulatory filings.
Under its founder, Jen-Hsun Huang, Nvidia has become one of the chipmakers leading the charge to provide the underpinnings of machine intelligence in everything from data centres to automobiles. As the biggest maker of graphics chips, Nvidia has proved that type of processor’s ability to perform multiple tasks in parallel has value in new markets, where artificial intelligence is increasingly important.
Nvidia shares rose 2.2% to US$141.25 at 3:27pm in New York last Friday, giving it a market value of US$84.1bil.
The Santa Clara, California-based company has been a good bet for those that backed it. Nvidia’s stock more than tripled in 2016 and is up 32% this year. Since the stock started rallying in 2013 it’s climbed by at least 25% each year.
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. SoftBank 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. — Bloomberg