SoftBank Builds Nvidia, TSMC Stakes Under Son's Focus on AI Gear

Mint

2 days ago

(Bloomberg) -- SoftBank Group Corp. is building up stakes in Nvidia Corp. and Taiwan Semiconductor Manufacturing Co., the latest reflection of Masayoshi Son's focus on the tools and hardware underpinning artificial intelligence.
The Japanese technology investor raised its stake in Nvidia to about $3 billion by the end of March, up from $1 billion in the prior quarter, according to regulatory filings. It bought around $330 million worth of TSMC shares and $170 million in Oracle Corp., they show.
That's while SoftBank's signature Vision Fund has monetized almost $2 billion of public and private assets in the first half of 2025, according to a person familiar with the fund's activities. The Vision Fund prioritizes its returns on investment and there is no particular pressure from SoftBank to monetize its assets, said the person, who asked not to be named discussing private information. A representative of SoftBank declined to comment.
At the heart of SoftBank's AI ambitions is chip designer Arm Holdings Plc. Son is gradually building a portfolio around the Cambridge, UK-based company with key industry players, seeking to catch up after largely missing a historic rally that's made Nvidia into a $4 trillion behemoth and boosted its contract chipmaker TSMC near a $1 trillion value.
'Nvidia is the picks and shovels for the gold rush of AI,' said Ben Narasin, founder and general partner of Tenacity Venture Capital, referring to a concerted effort by the world's largest technology companies to spend hundreds of billions of dollars to get ahead. SoftBank's purchase of the US company's stock may buy more influence and access to Nvidia's most sought-after chips, he said. 'Maybe he gets to skip the line.'
SoftBank, which reports quarterly earnings Thursday, should've benefited from that bet on Nvidia — at least on paper. Nvidia has gained around 90% in market value since hitting a year's low around early April, while TSMC has climbed over 40%.
That's helping to make up for missing out on much of Nvidia's post-ChatGPT rally — one of the biggest of all time. SoftBank, which was early to start betting on betting on AI long before OpenAI's seminal chatbot, parted with a 4.9% stake in Nvidia in early 2019 that would be worth more than $200 billion today.
Crippling losses at the Vision Fund also hampered SoftBank's ability to be an early investor in generative AI. The company's attempts to buy back some Nvidia shares, alongside those of proxy TSMC, would help Son regain access to some of the most lucrative parts of the semiconductor supply chain.
The 67-year-old SoftBank founder now seeks to play a more central role in the spread of AI through sweeping partnerships. These include SoftBank's $500 billion Stargate data center foray with OpenAI, Oracle and Abu Dhabi-backed investment fund MGX. Son is also courting TSMC and others about taking part in a $1 trillion AI manufacturing hub in Arizona.
As Arm's intellectual property is used to power the majority of mobile chips and is increasingly used in server chips, SoftBank could carve out a unique position without being a manufacturer itself, according to Richard Kaye, co-head of Japan equity strategy at Comgest Asset Management and a long-time SoftBank investor.
'I think he sees himself as the natural provider of AI semiconductor technology,' he said. 'What Son really wants to do is capture the upstream and the downstream of everything.'
Investors have cheered Son's audacious plans, while analysts say they expect SoftBank to report a swing back to a net income in the June quarter. SoftBank shares marked a record high last month. SoftBank's planned $6.5 billion deal to acquire US chip firm Ampere Computing LLC and another $30 billion investment in OpenAI are further encouraging investors who see the stock as a way to ride the US startup's momentum.
Son, however, remains dissatisfied, according to people close to the billionaire. Son sees the big projects in the US as having the potential to help SoftBank leapfrog the current leaders in AI to become a trillion-dollar or bigger company, they said.
The stock continues to trade at a roughly estimated 40% discount to SoftBank's total assets — which includes a roughly 90% stake in the $148 billion-valued Arm. SoftBank's market capitalization stands at around $119 billion, a fraction of Nvidia's $4.4 trillion valuation and that of other tech companies most closely associated with AI progress.
Son, who in the past has seen Washington hamper or derail merger plans like the union of Arm and Nvidia, seeks to leverage his relationship with Donald Trump and is arranging frequent meetings with White House officials. Those efforts are now critical as AI and semiconductors become geopolitical flash points. SoftBank's plan to buy Ampere is facing a probe by the Federal Trade Commission.
Attention at its June quarter earnings will be on what other assets SoftBank might sell down to help it secure the liquidity it needs to double down on hardware investments. The Japanese company has so far raised around $4.8 billion through a sale of some of its T-Mobile share holding in June. Its Chief Financial Officer Yoshimitsu Goto has cited the company's end-March net asset value of ¥25.7 trillion ($175 billion), saying the company has ample capital to cover its funding needs.
In the business year ended March, the Vision Fund's exits included DoorDash Inc. and View Inc., as well as cloud security company Wiz Inc. and enterprise software startup Peak, even as SoftBank bought up the stakes in Nvidia, TSMC and Oracle.
'We're after AI using an array of startups and group companies,' Son told shareholders in June. 'We want to become the organizer of the No. 1 platformer in the artificial super intelligence era.'
--With assistance from Edwin Chan.
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