Masayoshi Son, Softbank Founder, Missed Out on Monster Rally in Nvidia Shares

by Frank McDougall
in News
on 25 June 2024

Even the most astute tech investors can make mistakes, as evidenced by Masayoshi Son, the founder of Softbank Vision Fund. Son, Japan’s richest man, owned a 5% stake in Nvidia, the chip vendor behind the AI revolution, which is currently valued at approximately $160 billion. However, Son sold his entire stake over five years ago when the stock experienced a significant drop, only worth around $4 billion at the time. Son expressed his regret over this missed opportunity, stating, “I had to tearfully sell the shares. The fish that got away was big.”

If Son had held onto his stake in Nvidia, it would now be even more valuable than his prescient investment in Alibaba, where Softbank held a significant stake. Softbank invested $20 million in Alibaba in 2000, which eventually grew to approximately $60 billion when the company went public in 2014. This investment made history as the largest IPO at the time.

Son used the success of the Alibaba investment to create Softbank’s Vision Fund, a groundbreaking investment vehicle intended to raise $100 billion for disruptive technology investments. With this unprecedented firepower, the fund made billion-dollar bets in companies such as Uber, Slack, and WeWork, as well as Nvidia.

Unfortunately, Son sold his shares in Nvidia prematurely, missing out on substantial profits. In February 2019, Softbank announced that it had entirely exited its position in Nvidia when it was valued at around $3.6 billion. Son himself admitted, “It’s frustrating to remember the ones that I missed.”

To make amends, Son is now focused on a new $100 billion fund for artificial super intelligence (ASI), named after the Shinto god of creation, Izanagi. While Son did not provide specific details about the fund, he assured that it would live up to its grand name and expressed his firm belief that his purpose in life is to make ASI a reality.

While Son might have missed out on the Nvidia rally, his determination to forge ahead with ambitious investments suggests that he is unwavering in his pursuit of transformative technologies that can shape the future.

Facts not mentioned in the article:
1. Masayoshi Son is a Japanese business magnate and philanthropist.
2. Softbank Vision Fund is a subsidiary of Softbank Group, a multinational conglomerate.
3. Nvidia Corporation is an American technology company known for its graphics processing units (GPUs) and artificial intelligence capabilities.

Key questions:
1. How much did Masayoshi Son’s stake in Nvidia amount to when he sold it?
2. What was the reason behind Son’s decision to sell his entire stake in Nvidia?
3. What other successful investments has Softbank Vision Fund made?

Key challenges or controversies:
1. The controversy surrounding Softbank’s investment in WeWork, which faced financial and leadership issues.
2. The challenges associated with investing in disruptive technologies that are prone to volatility and uncertainty.
3. The potential risk of missing out on future opportunities due to premature exits from investments.

Advantages:
1. Masayoshi Son has a track record of successful investments, including Alibaba.
2. Softbank Vision Fund has significant financial resources to make large-scale investments.
3. Son’s determination and ambition in pursuing transformative technologies could lead to future successes.

Disadvantages:
1. The risk of making costly investment mistakes, as seen with Son’s sale of Nvidia shares.
2. The potential challenges and uncertainties associated with investing in emerging technologies.
3. The need for careful evaluation and risk management to avoid further missed opportunities.