Legendary billionaire tech investor makes an amazing claim about Nvidia's stock
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The story between Nvidia (NVDA) and SoftBank dates back to 2017, when Masayoshi Son, the investment company's founder, acquired a $4 billion stake in the chipmaker.
At the time, Nvidia was already making waves with its cutting-edge graphics processing units, which were becoming essential in fields beyond gaming, including artificial intelligence and data centers.
The purchase was just after SoftBank’s $32 billion acquisition of Arm in 2016, both key parts of SoftBank’s strategy to invest in AI.
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Son said in 2017 that he expected machines to reach IQs of 10,000 within the next 80 years or so.
“That is happening in this century, for sure,” Son said. “I would say there is no more debate, no more doubt. Will it be in 30 years? Twenty-five years? Thirty-five years? It’s just margin of error, in my view.”
Tomohiro Ohsumi/Getty Images
Nvidia was struggling in 2019, with its share price nearly cut in half from its 2018 high. SoftBank sold its stake in Nvidia in 2019, just two years after the initial investment, pocketing more than $3 billion.
But if SoftBank had held on to its original investment in Nvidia, it would be valued more than $15 billion as the chipmaker soared 2600% over the past five years.
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Widespread demand for AI-optimized chips, particularly the Blackwell GPUs, is fueling Nvidia's ascent. These graphics processing units are increasingly used in data centers as they handle the heavy lifting required to train and operate large AI models efficiently.
Nvidia's major clients include Google parent Alphabet, Microsoft, Meta, and Amazon. Each depends on Nvidia’s technology to develop AI-driven applications and services for cloud data center customers.
The demand for Blackwell chips is so intense that industry heavyweights are vying for a slice. In a now-famous dinner, Oracle’s Larry Ellison and Tesla’s Elon Musk reportedly urged Nvidia CEO Jensen Huang to “take more of our money.”
“Everybody wants to be first, and everybody wants to be most,” Huang said.
Related: Analyst revamps Nvidia stock price target after investor meetings
Nvidia’s production pipeline for Blackwell is fully booked through next year, with the first shipments anticipated in November and wider availability planned for early 2025.
Big Tech’s upcoming earnings reports will likely echo Nvidia’s direct or indirect influence. Google-parent Alphabet, Microsoft, Meta Platforms, Apple, and Amazon all report earnings this week. (Microsoft's Q1 report disappointed investors.)