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SoftBank Shares Drop as Nvidia Stake Sale Reveals Deep AI Funding Demands

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SoftBank Group (9984.T) shares plunged as much as 10% on Wednesday, after the company’s $5.8 billion sale of its Nvidia stake raised questions about how it will finance its massive new AI investment spree, including major commitments to OpenAI.

The Japanese conglomerate is preparing to fund a $22.5 billion follow-on investment in OpenAI, alongside a $6.5 billion acquisition of chipmaker Ampere and a $5.4 billion purchase of ABB’s robotics division. Analysts estimate these moves bring SoftBank’s recent spending commitments to over $41 billion.

Despite holding 4.2 trillion yen ($27.9 billion) in cash at the end of September, CreditSights analyst Mary Pollock said the group’s short-term funding needs remain “substantial.” She added that SoftBank will likely need to “be proactive” in sourcing additional liquidity to sustain its AI push.

The selloff also reflects investor concerns that tech valuations are overstretched, even as SoftBank doubles down on its “all-in” strategy for artificial intelligence. Founder and CEO Masayoshi Son, long known for his high-risk investing style, remains confident that AI will define the next era of growth.

“The Nvidia position was large, liquid, and easy to monetize,” said Rolf Bulk, analyst at New Street Research, noting that SoftBank likely sees more upside by reallocating funds toward OpenAI.

SoftBank’s shares, which had quadrupled between April and October, closed the day down 3.46% after paring earlier losses. Nvidia and Arm Holdings, the chip designer SoftBank controls, also slipped around 3% overnight.

To fuel its aggressive investment agenda, SoftBank has raised funds through bond issuances and multi-billion-dollar loans, including an $8.5 billion facility for OpenAI and a $6.5 billion bridging loan for Ampere. CFO Yoshimitsu Goto said the group’s debt ratio of 16.5% is “actually a bit too safe,” signaling room for more leverage.

SoftBank’s Vision Fund CFO Navneet Govil defended the spending, arguing that today’s AI sector is fundamentally different from past speculative bubbles: “AI companies are generating meaningful revenues. The capital expenditure boom is driven by real demand.”

AI-driven data centre boom boosts ABB’s U.S. sales and orders

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Swiss engineering giant ABB reported a strong third quarter as surging investment in data centres across the United States drives demand for its industrial robots, electrification products, and power solutions.

The company said new U.S. orders rose 27% in the third quarter, powered largely by the expansion of data centres needed to process artificial intelligence workloads. “It’s the normal standard business where there is strong demand,” said CEO Morten Wierod, noting the rise was not linked to U.S. import tariffs.

ABB generates about 7% of its revenue from data centres, up from 6% a year ago, and provides uninterruptible power supplies and electrification systems that keep critical servers online. Wierod said the AI boom is also driving broader electrification, forcing utilities and industrial sectors to increase investments.

Earlier this week, ABB announced a partnership with Nvidia to develop advanced infrastructure for next-generation data centres.

The company posted a 12% rise in operating EBITA to $1.74 billion, topping forecasts, while revenue grew 11% to $9.08 billion. Orders also climbed 12%. ABB’s shares initially rose 2.5% after the results before easing later in the session.

Chief Financial Officer Timo Ihamuotila, who will step down next year, said U.S. tariffs have had only a limited impact, costing “tens of millions” of dollars in profit, which the company has offset with price adjustments and efficiency gains. ABB currently manufactures about 75–80% of its U.S. products domestically, with plans to raise that to 90% through new factory investments.

Experts divided over whether AI boom is a bubble or sustainable revolution

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The massive wave of investment in artificial intelligence has triggered debate across global markets over whether the surge mirrors the dot-com bubble or represents a sustainable technological revolution. Companies have poured hundreds of billions of dollars into AI infrastructure, fueling record valuations — but also investor caution.

A BofA Global Research survey showed that 54% of fund managers now believe AI stocks are in a bubble, compared with 38% who disagree, highlighting the growing divide between optimism and skepticism.

The Bank of England warned on October 8 that global markets could tumble if sentiment toward AI shifts, saying “the risk of a sharp market correction has increased.”

Other experts, however, see the AI boom as a long-term growth story. Goldman Sachs economist Joseph Briggs argued that the investment surge remains macroeconomically sustainable, though he noted that “the ultimate AI winners remain less clear.”

ABB CEO Morten Wierod echoed that sentiment, saying, “I don’t think there is a bubble, but we do see constraints in construction capacity,” adding that the industry is dealing with “trillions in investment” and limited human resources.

Amazon founder Jeff Bezos said investor enthusiasm is not inherently negative: “When people get very excited … every experiment gets funded. Some will fail, but society benefits when the winners emerge.”

IMF chief economist Pierre-Olivier Gourinchas compared the AI boom to the early 2000s tech frenzy but said it’s less likely to trigger a systemic crash because it’s not driven by debt.

OpenAI CEO Sam Altman offered a more candid view: “Are investors overexcited about AI? Yes. Someone is going to lose a phenomenal amount of money — and others will make a phenomenal amount.”

Despite these warnings, UBS strategists found that 90% of investors who believe in an AI bubble remain heavily invested, suggesting confidence in the sector’s long-term potential even as valuations soar.