SoftBank buys big into Nvidia

SAN FRANCISCO: SoftBank Group Corp has quietly amassed a $4 billion stake in Nvidia Corp, making it the fourthlargest 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%, just under the amount that would require a regulatory disclosure in the United States, 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 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.

SoftBank shares reversed losses and closed mostly unchanged on the news. Nvidia shares rose as much as 5.5% in Germany to an intraday record high.

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 $80 billion.

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 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 US and acquired control of larger companies such as UK chipmaker ARM Holdings Plc and US 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.