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

[SAN FRANCISCO] SoftBank Group Corp has quietly amassed a US$4 billion stake in Nvidia Corp 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 on Saturday. A holding of 4.9 per cent, just under the amount that would require a regulatory disclosure in the US, 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.

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

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

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.

Nvidia, which is the biggest maker of graphics chips used by computer gamers, earlier this month countered concern among analysts that its share price appreciation had outrun its ability to grow profit by reporting earnings that beat estimates and forecasting a further improvement.

The results showed that gains are being driven by progress expanding into new markets, such as automotive and data centers.

Son set up the planned US$100 billion Vision Fund so he can pursue even more ambitious deals than he's been able to do on his own. He has invested in startups in China, India and the US and acquired control of larger companies such as UK chipmaker ARM Holdings Plc and US wireless operator Sprint Corp.

SoftBank invested US$5 billion into the Chinese ride-hailing giant Didi Chuxing last month in the largest-ever venture fundraising.

This month, the Japanese company put US$1.4 billion into the digital payments startup Paytm in the largest funding round from a single investor in India's technology sector.

Mr Son has made the US a particular focus after meeting with President Donald Trump in December and pledging to create 50,000 new jobs in by investing US$50 billion in startups and new companies.

That month, SoftBank contributed US$1 billion to a funding round in OneWeb Ltd, a satellite startup based at Exploration Park, Florida near Kennedy Space Center.

In March, SoftBank invested US$300 million in WeWork Cos, a US startup that rents out office space and desks to small businesses and freelancers.

BLOOMBERG