After Nvidia exit, SoftBank CEO says AI investment bubble fears are 'foolish'

Japanese giant Softbank Group CEO Masayoshi Son has rejected concerns about a bubble in artificial intelligence investment, calling such doubts as ‘a foolish question’. Son sold the entire stake of Softbank in Nvidia for $5.83 billion.

The sale came as SoftBank founder and CEO Masayoshi Son geared up for wave of investments in artificial intelligence (AI). After the Nvidia stake sale, the Tokyo-based company continues to hold stakes in other leading AI players, including OpenAI and Oracle Corp. Now, Son said that AI will transform the lives completely. According to a report by Fortune, speaking at the company’s annual event in Tokyo, Son said, “AI will transform our lives completely, and do so in a way that generates profits.”

Son also argued that questioning AI’s values is similar to questioning the use of cars or planes. “Those who refuse to evolve are closing down their world. Those who condemn AI are themselves spitting upward,” he said.

When Japan's richest man sold his stake in Nvidia and raced to fulfill his promise to Sam Altman

Late last year, Masayoshi Son’s SoftBank Group moved swiftly to finalise a massive $22.5 billion funding commitment to Sam Altman’s OpenAI, deploying a complex mix of cash-raising methods. To free up capital, the Japanese investment giant sold its entire $5.83 billion stake in Nvidia and liquidated $12.73 billion worth of T-Mobile stock between June and December.

SoftBank also tapped loans backed by other holdings, including chip designer Arm, as part of its effort to funnel money toward OpenAI.

SoftBank’s bet in OpenAI is based on its visibility into the startup’s technology and business model, as well as communication with top management, SoftBank Chief Financial Officer Yoshimitsu Goto said. “We are investing in OpenAI with high conviction that the company will lead in developing AI,” he said.

Regarding further commitments to the startup, “nothing concrete has been decided,” he said. SoftBank will stick to its policy of keeping enough liquidity on hand to cover two-years’ worth of bond repayments, Goto said.

Trillions needed for AI infrastructure

Son also estimated that close to $5 trillion in annual global investment will be needed to expand data centers and increase chip production and also build energy systems to support AI. He also predicted that by the year 2040, around 20% of the world’s GDP will be replaced by AI-related industries, ushering in what he called the ‘world of superintelligence’.SoftBank has invested $34.6 billion in OpenAI and last year sold its stake in Nvidia to free up funds for AI and data center projects. The company recently reported profits soaring nearly five-fold to 5 trillion yen ($32 billion) for the fiscal year through March, driven by AI investments.SoftBank has also launched a battery business in Japan to build next-generation electric power infrastructure, anticipating rising electricity demand from AI use.

SoftBank’s growing AI empire

Analysts see SoftBank’s AI focus as a key growth driver. “The number of bets from which SoftBank is successfully recouping its investment has increased, so we raise our forecasts,” Citigroup analyst Keiichi Yoneshima wrote in a note before the company’s earnings.Son, 68, is ramping up investment in AI and semiconductor infrastructure while scaling back other projects. His initiatives include the Stargate data center rollout and a planned $30 billion investment in OpenAI.

SoftBank is also in talks with Taiwan Semiconductor Manufacturing Co. (TSMC) and others to create a $1 trillion AI manufacturing hub in Arizona. The company has even explored acquiring US chipmaker Marvell Technology Inc.

earlier this year.However, SoftBank faces the challenge of balancing its massive AI investments — including roughly $20 billion for OpenAI and $6.5 billion for chip designer Ampere Computing LLC. Analysts have raised concerns over inflated AI valuations and whether the returns will justify the heavy spending.

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