SoftBank's Nvidia exit fuels OpenAI push despite mounting losses, stiff competition from Anthropic

Core Viewpoint - SoftBank has sold its entire stake in Nvidia for approximately $5.8 billion to fund significant investments in OpenAI, indicating a strategic shift towards the application layer of AI rather than infrastructure [1][2][3] Company Actions - SoftBank sold over 32 million shares of Nvidia, valued at nearly $6 billion, as part of a broader repositioning strategy [2] - To raise cash for investments in OpenAI, SoftBank also sold more than $9 billion worth of T-Mobile stock and utilized a margin loan on its ARM stake [3] Investment Strategy - The decision to exit Nvidia is not a reflection of its future valuation but rather a strategic move towards what SoftBank perceives as the next wave of value creation in AI [4] - SoftBank is leading a $40 billion primary funding round for OpenAI, which is expected to conclude soon [3] Competitive Landscape - OpenAI's main competitor, Anthropic, is projected to achieve profitability sooner than OpenAI, with 85% of Anthropic's revenue coming from business customers compared to OpenAI's 70% from consumer products [6][7] - OpenAI is expected to incur significant losses, projected at $74 billion in 2028, while burning through 14 times more cash than Anthropic before reaching profitability in 2030 [8][9] Financial Outlook - OpenAI's CEO has indicated an optimistic revenue projection, expecting to generate hundreds of billions of dollars by 2030, despite the anticipated losses [10] - Analysts have raised concerns about OpenAI's financial sustainability, noting that it burned $12 billion in Q3 alone [9][11]