SoftBank Doubles Down: Bullish Bet on AI Titans Nvidia and TSMC Signals Big Tech Confidence

SoftBank just made a power move—loading up on shares of chip giants Nvidia and TSMC like they're going out of style (which, given AI's relentless march, they definitely aren't).

Why it matters: When the Vision Fund starts throwing weight behind semiconductor leaders, it's either genius or another 'brilliant' gamble with Saudi oil money. This time, the chips are stacked in their favor.

The playbook: Dominate the silicon fueling AI's takeover. Nvidia's GPUs and TSMC's fabs are the picks and shovels of the generative gold rush—and SoftBank wants a piece of every transaction.

Reality check: After the Arm IPO debacle, Masayoshi Son needs a win. Backing the two companies literally building the future? Not the worst rebound strategy.

Son Rebuilds AI empire around arm to reclaim lost ground in chip race

At the center of SoftBank’s AI strategy is Arm Holdings Plc, the UK-based chip designer with a 90% stake. Son is now crafting a portfolio of key industry players around Arm, aiming to regain ground after missing the historic AI-fueled rally that propelled Nvidia to a $4 trillion valuation and TSMC close to $1 trillion.

“Nvidia is the picks and shovels for the Gold rush of AI,” said Ben Narasin, founder of Tenacity Venture Capital. SoftBank’s growing stake in Nvidia may give it greater influence — and potentially faster access — to the chipmaker’s in-demand hardware, he added. “Maybe he gets to skip the line.”

SoftBank is expected to report strong paper gains from its Nvidia bet when it announces earnings on Thursday. Since its April low, Nvidia’s market value has surged nearly 90%, while TSMC shares are up over 40%.

Despite being an early believer in AI, SoftBank sold a 4.9% stake in Nvidia in 2019 — a position that WOULD now be worth more than $200 billion. Massive losses at the Vision Fund also limited its capacity to invest aggressively in generative AI early on.

Son spearheads large-scale initiatives like the $500 billion Stargate data center project with OpenAI, Oracle, and Abu Dhabi’s MGX fund. He’s also in talks with TSMC and others to build a $1 trillion AI chip manufacturing hub in Arizona.

Comgest Asset Management’s Richard Kaye believes Son views himself as the natural provider of AI semiconductor technology, aiming to control the industry’s upstream and downstream segments.

SoftBank rallies investors as Son eyes big AI deals

Investors are buying into Son’s vision. SoftBank’s shares hit a record high last month, buoyed by strong AI exposure and plans for a $6.5 billion acquisition of Ampere Computing LLC and a possible $30 billion investment in OpenAI.

Still, SoftBank trades at a roughly 40% discount to its net asset value, which includes its dominant stake in the $148 billion-valued Arm. Its $119 billion market cap remains a fraction of AI giants like Nvidia.

To navigate regulatory headwinds, Son is leveraging his connections with Donald TRUMP and is reportedly holding frequent meetings with U.S. officials. This comes as SoftBank’s planned acquisition of Ampere faces an FTC review amid heightened scrutiny of AI and semiconductor deals.

Investors will be watching Thursday’s earnings for clues on which assets SoftBank may divest next to fund its hardware ambitions. The firm raised about $4.8 billion in June by selling part of its T-Mobile stake. CFO Yoshimitsu Goto has cited a net asset value of ¥25.7 trillion ($175 billion), indicating sufficient liquidity for continued expansion.

Over the past year, the Vision Fund exited holdings in DoorDash, View Inc., Wiz, and Peak, while ramping up purchases of Nvidia, TSMC, and Oracle shares.

In June, Son told shareholders that SoftBank is pursuing AI through a broad network of startups and group companies, intending to position itself as the key architect behind the leading platform in the era of artificial super intelligence.

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