Softbank buys Nvidia stake, worth a reported $4 billion

Deal is linked to $93 billion Vision Fund, and would make Softbank Nvidia's fourth largest shareholder

By Matthew Handrahan.Published Thursday 25th May 2017, 7:46am GMT

Softbank has made a sizable investment in Nvidia Corp., taking a reported $4 billion stake to become the chip-maker's fourth largest shareholder.

The investment was disclosed by Softbank when it announced the closure of its Vision Fund; $93 billion raised to be invested in tech companies, with contributions from Apple, Qualcomm and Foxconn, among others. The Vision Fund will pay out a minimum of $100 million to companies in a variety of areas, including robotics, mobile apps and AI.

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AI is the likely reason for Softbank's Nvidia investment, which Bloomberg's sources have claimed is equivalent to 4.9% of the company - or $4 billion. The terms of the Vision Fund allow Softbank to transfer certain investments made on its own, including the one in Nvidia.

Nvidia has been one of the most successful companies in the tech sector over the last few years, with its stock tripling in value in the last year alone. It remains on on influential force in the games industry, but the role of its technology in areas like AI and machine learning have been a key driver. At the time of writing, Nvidia's market cap was $81 billion.

Softbank has been an active investor in companies in and around the games industry for many years, most notably in the deals for GungHo and Supercell. This Nvidia investment is the latest in a new run, which includes buying ARM for $24 billion in July 2016, and leading Improbable's $502 million round earlier this month.

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