SoftBank uses OpenAI as “Big Short” investors are wary

Softbank sells all shares Nvidia — but it’s not for the reason you’re thinking.

In an earnings report released Tuesday, the Japanese group said it sold 32.1 million Nvidia shares in October for $5.83 billion.

At first glance, this could be read as a sign that Nvidia’s high valuation is causing concern for SoftBank. And if SoftBank, which infamously pumped $18.5 billion into WeWork and ultimately valued it at $2.9 billion, is tempering its usual investment optimism, retail traders should probably take note.

Adding to these concerns are comments from Michael Varley about the big artificial intelligence companies that bet on subprime lending before it sparked a full-scale financial crisis in 2008.

In a post on X on Monday, Barry wrote that these companies are “underestimating the depreciation” of their AI chips, which “artificially inflates profits. One of the most common scams of our time.” CNBC could not independently confirm whether the companies are doing this.

However, this doesn’t seem to worry SoftBank. A person familiar with the group’s sale told CNBC it had nothing to do with AI’s valuation. On the contrary, cash from offloading Nvidia chips will be directed toward SoftBank’s $22.5 billion investment in OpenAI, the people said.

In his post, Berry said he would reveal “further details” on November 25th and asked readers to “stay tuned for more information.” That may not be enough of an attraction for SoftBank CEO Masayoshi Son.

—CNBC’s Yun Li, April Roach and Dylan Butts contributed to this report.