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Softbank’s Sale of Nvidia Stake Could Signal a Pullback in Deal Size

Softbank's Sale of Nvidia Stake Could Signal a Pullback in Deal Size

On Wednesday, Softbank Corp. revealed that the Vision Fund, its global mega-fund, is dumping its entire stake in Nvidia .

Dragged down by macroeconomic concerns and other factors, Nvidia ( NVDA ) shares have lost around 40% of their value in the past six months and Softbank CEO and chairman Masayoshi Son cited the sinking stock price the company’s decision to dump its 5% stake in Nvidia, which it acquired in 2017.

“Due to the deterioration of Nvidia share price, SoftBank Group’s consolidated operating income had about ¥400 billion of negative impact, ¥400 billion of negative impact from this deterioration of Nvidia stock price,” Son said. That negative impact is equivalent to about $3.6 billion.

The sale of the Nvidia stake places a renewed focus on Softbank’s Vision Fund, a $100 billion fund established in 2016 that has since been dropping massive checks on various tech unicorns , from Uber and WeWork to Flipkart and Didi Chuxing, along with dozens of other startups across the globe. It’s been described as a bull in a china shop by venture capitalists for its ability to cut billion-dollar checks.

The Vision Fund’s investment thesis is broad and spans AI, mobility, logistics, autonomous driving, IoT and security — and the Nvidia stake sat at the cross-section of several of these. In an October 2018 presentation about the Vision Fund, Softbank placed the Nvidia stake as part of a cluster of investments focused on image recognition and processing, a subset of AI that’s especially relevant to autonomous driving. Nvidia’s Xavier processor , designed for autonomous driving and related services, is central to its positioning in the booming field of autonomous car development.

Softbank didn’t immediately respond to a request for comment on the Vision Fund’s focus going forward. On a call with investors on Wednesday, Son further dug in […]

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