SoftBank said to take US$4 billion stake in chipmaker Nvidia

Japan's SoftBank have bought an undisclosed amount of Nvidia stock, said to be worth around US$4 billion.
Japan's SoftBank have bought an undisclosed amount of Nvidia stock, said to be worth around US$4 billion. PHOTO: REUTERS

TOKYO (BLOOMBERG) - SoftBank Group has quietly amassed a US$4 billion (S$5.6 billion) stake in Nvidia making it the fourth largest shareholder in the graphics chipmaker, according to people familiar with the situation.

The Japanese company, which just closed its Vision Fund, disclosed it owned an unspecified amount of Nvidia stock when it announced US$93 billion of commitments to the technology investment fund last Saturday.

A holding of 4.9 per cent, just under the amount that would require a regulatory disclosure in the United States, would be worth about US$4 billion.

A stake in Nvidia fits with SoftBank founder Masayoshi Son's plans to become the biggest investor in technology over the next decade, with bets on emerging trends such as artificial intelligence.

Nvidia, under founder Huang Jen-Hsun, has become one of the leaders of the charge by chipmakers to provide the underpinnings of machine intelligence in everything from data centres to automobiles.

In announcing the Vision Fund's capital commitments, SoftBank said the fund will have the right to acquire several investments including its Nvidia stake.

SoftBank shares reversed losses and closed mostly unchanged on the news. Nvidia shares rose as much as 5.5 per cent in Germany.

Depending on when the shares were acquired, Mr Son may have made a savvy wager. Nvidia's stock tripled last year and is up 28 per cent again this year, giving the company a market value of more than US$80 billion. Its worst annual gain, since it started rallying in 2013, was the 25 per cent run up achieved in 2014.

Mr Son set up Vision Fund so that he can pursue more ambitious deals than he has been able to on his own. He has invested in start-ups in China, India and the US and acquired control of larger companies such as British chipmaker ARM Holdings.

This month, SoftBank put US$1.4 billion into the digital payments start-up Paytm in the largest funding round from a single investor in India's technology sector.