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SoftBank bets on AI with $4bn stake in Nvidia

Comes just months after the Japanese tech giant was looking to sell a huge stake in ARM.

By Ellie Burns

SoftBank is betting big on AI, with the Japanese tech giant having become Nvidia’s fourth-largest shareholder after building a $4bn stake in the chip maker.

According to reports from Bloomberg, SoftBank’s billion-dollar stake in Nvidia was announced as part of a further $93bn of commitments to its Vision technology investment fund.

Although SoftBank did not specific the size of the stake, an educated guess would put the holding at around $4bn. The guess coming as educated stems from the fact that a 5% stake would require a regulatory disclosure, with a 4.9% stake standing at around $4bn.

READ MORE: SoftBank, Saudi Arabia create $100bn London based tech fund

The stake in Nvidia suggests that SoftBank is betting big on AI, with Nick Jones at Cavendish Corporate Finance saying:

“$4 billion holding indicates SoftBank’s bet on artificial intelligence.”

“As the fourth largest investor in Nvidia, SoftBank has invested a significant stake in the US chip manufacturer. The transaction is a bet on Artificial intelligence, a sector which is rapidly becoming a driving factor in technology M&A, with over 30 acquisitions of Artificial Intelligence taking place in the first quarter of 2017 alone.

AI startups“This acquisition of shares is another step by SoftBank founder Masayoshi Son to become the world’s biggest technology investor over the next decade and follows investments in Chinese ride-hailing giant, Didi Chuxing, and the Indian digital payments startup, Paytm.

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“This is also likely to be the first of many US investments made by SoftBank in the US, following a meeting with President Trump last December and a pledge to create 50,000 new jobs in by investing $50 billion in startups and new companies.”

The investment in Nvidia is an interesting move, seeing as SoftBank was looking to offload a huge stake in fellow chip-maker ARM. In March of this year, it was reported that the Japanese company was looking to sell a 25% stake in the company to a Saudi-backed investment group.

According to reports, the deal with the Saudi-backed investment group was being driven by SoftBank founder Masayoshi Son, who was looking to secure investment for his Vision Fund.

 

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