SoftBank sells its entire stake in Nvidia for $5.83 billion

SoftBank sold 32.1 million shares of Nvidia in October. It also sold a portion of its stake in T-Mobile for $9.17 billion.

This isn't the first time SoftBank has withdrawn money from the chip maker.

Despite this sale, SoftBank remains connected to Nvidia through its other artificial intelligence ventures.

SoftBank said on Tuesday that it sold its entire stake in American chip maker Nvidia for $5.83 billion. The Japanese giant is looking to capitalize on its "all-in" bet on ChatGPT maker OpenAI.

The company said in its earnings statement that it sold 32.1 million shares of Nvidia in October. It also disclosed that it sold a portion of its stake in T-Mobile for $9.17 billion.

"We want to provide a wide range of investment opportunities for investors while still maintaining financial strength," SoftBank Chief Financial Officer Yoshimitsu Goto said during an investor presentation.

"Therefore, through these options and instruments, we ensure that we are prepared to raise financing in a highly secure manner," he said in comments translated by the company, adding that the stake sale was part of the firm's "asset monetization" strategy.

Nvidia shares fell 2% on Tuesday.

A person familiar with the matter told CNBC that the sale of Nvidia shares, the partial sale of T-Mobile shares, and a margin loan on SoftBank's stake in Arm are all "sources of cash that will be used to fund the $22.5 billion investment in OpenAI." He further added that this cash will fund other projects the firm is working on, such as the acquisition of ABB's robotics unit.

The person said that Nvidia's stake sale has nothing to do with concerns about artificial intelligence valuations.

While Nvidia's exit may be surprising to some investors, it's not the first time SoftBank has pulled money from the American AI chip darling.

SoftBank's Vision Fund was an early backer of Nvidia, acquiring a $4 billion stake in 2017 before selling its entire stake in January 2019. Despite its recent sale, SoftBank's business interests remain deeply intertwined with Nvidia.

The Tokyo-based company is involved in several AI ventures that rely on Nvidia's technology, including the $500 billion Stargate project for data centers in the US.

Rolf Bulck, equity research analyst at New Street Research, told CNBC, "In our view, this shouldn't be seen as a cautious or negative stance towards Nvidia, but rather in the context that SoftBank needs at least $30.5 billion in capital to invest in the October-December quarter, including $22.5 billion for OpenAI and $6.5 billion for Ampere."

Bulck added, "This is more than the investments made in the last two years combined."

Morningstar's Dan Baker said he doesn't think the move will fundamentally change the company's strategy.

He said, "[SoftBank] did say they have no thoughts about NVIDIA. ... Ultimately, they're using this money to invest in other AI-related companies."