SoftBank Missed Out On $160 Billion in Gains With Artificial Intelligence (AI) Leader Nvidia -- but Its Regret Will Likely Be Short-Lived

Group 1: Nvidia's Market Position and Performance - Nvidia has a first-mover advantage in AI-accelerated data centers, with demand for its hardware exceeding supply, allowing for a significant price increase of its GPUs and an adjusted gross margin of 78.4% in the fiscal first quarter [1] - Nvidia's H100 GPU has become the preferred choice for businesses implementing generative AI solutions, with the company accounting for an estimated 98% of the 3.85 million AI GPUs shipped in the previous year [11] - The company's market value has surged by nearly $3 trillion in just over 18 months, indicating a substantial increase in investor interest and confidence [19] Group 2: SoftBank's Investment Journey - SoftBank initially invested in Nvidia in May 2017, acquiring a 4.9% stake through its Vision Fund, which had approximately $90 billion in available capital [8][9] - Despite realizing a profit of around $3 billion from its Nvidia stake, SoftBank missed out on an additional $160 billion in capital gains due to selling its position during the crypto bear market [4][10] - Following the IPO of Arm Holdings, SoftBank's stake in the company has appreciated significantly, increasing in value to almost $176 billion, reflecting a $112 billion gain in just 10 months [24] Group 3: AI Technology and Market Dynamics - Analysts at PwC project that AI could contribute $15.7 trillion to the global economy by 2030, highlighting the transformative potential of AI technology [6] - There is a growing competition for Nvidia, as its top customers are developing their own AI GPUs, which could impact Nvidia's pricing power and adjusted gross margin [14] - Many businesses are still uncertain about how to effectively deploy AI solutions, indicating a potential delay in widespread adoption and implementation [13]