Nvidia Plans Data Center Alongside OpenAI's Valuation Growth

SoftBank Group recently made a significant strategic shift, selling its entire 32.1 million share stake in Nvidia for $5.83 billion in October. This move, which caused SoftBank's shares to drop by up to 10%, is aimed at funding a substantial $22.5 billion investment in OpenAI, the company behind ChatGPT. SoftBank also divested some T-Mobile shares, raising an additional $9.17 billion, signaling a clear focus on artificial intelligence. Beyond OpenAI, SoftBank's AI ambitions include acquiring Ampere Computing for $6.5 billion and ABB's robotics division for $5.4 billion, with CFO Yoshimitsu Goto addressing market bubble concerns during their quarterly earnings call. The AI sector, while attracting massive investments, faces scrutiny. "Big Short" investor Michael Burry warns of a potential AI chip bubble, pointing to the short lifespan of GPUs and concerns that companies might be overstating profits by using longer depreciation periods for rapidly outdated hardware. He estimates a $176 billion understatement in depreciation between 2026 and 2028 for some tech giants. Morgan Stanley analysts also suggest a potential slowdown in the current AI stock boom, drawing comparisons to the dot-com bubble, noting rapid growth without clear profits for many AI companies. Despite these warnings, optimism persists. Economist Ed Yardeni advises investors to buy AI stocks during dips, viewing current market worries as a healthy sign. He highlights strong corporate earnings, with S&P 500 profits growing 14% year-over-year, and maintains a year-end S&P 500 price target of 7,000. Cloud providers, he notes, are significantly profiting from AI applications. Major players continue to pour resources into AI. OpenAI, led by CEO Sam Altman, is a central figure, with an annualized revenue run rate of $20 billion and aspirations for hundreds of billions. The company, currently valued at $500 billion in private sales, could potentially go public with a $1 trillion valuation, despite losing money due to massive investments, including $1.4 trillion for data centers. OpenAI is also integrating services like DoorDash and Figma into ChatGPT and plans its own web browser, Atlas. Nvidia itself is not slowing down, planning to invest $1 billion in a new AI-powered data center in northern Mexico. AMD is also a strong performer, forecasting over 35% annual growth in its AI data center business, with its stock jumping 8.6% after sharing robust long-term goals. Amazon-backed Anthropic committed $50 billion for US computing infrastructure, including new data centers in Texas and New York. Palantir Technologies stands out as a leading AI stock, showcasing a 40% annual revenue increase and an impressive 80.81% gross margin with its AIP platform, which helps businesses achieve efficiency and savings. Further investments and successes are evident across the industry. Microsoft-backed AI chip startup D-Matrix recently secured $275 million in new funding. South Korean software company Hancom reported a third-quarter operating profit of 12.3 billion won (approximately $9 million USD) driven by strong AI software sales. Litmus, an Industrial Edge Data Platform, received significant investment from Insight Partners to accelerate its industrial AI growth. Attentive.ai also secured $30.5 million in Series B funding, led by Insight Partners, to advance its Beam AI platform for automating preconstruction tasks for over 1,100 construction companies. The global spending on AI is projected to reach $1.3 trillion by 2029, underscoring the immense potential and ongoing expansion of the sector, even amidst market concerns.

Key Takeaways

• SoftBank Group sold its entire $5.83 billion stake in Nvidia to fund a $22.5 billion investment in OpenAI, alongside other AI acquisitions.
• OpenAI, led by Sam Altman, has a $20 billion annualized revenue run rate and aims for a $1 trillion valuation, despite significant data center investment costs of $1.4 trillion.
• AMD forecasts over 35% annual growth in its AI data center business, with its stock jumping 8.6% on strong long-term goals.
• Nvidia plans a $1 billion investment in a new AI-powered data center in northern Mexico.
• Amazon-backed Anthropic committed $50 billion for US computing infrastructure, including new data centers in Texas and New York.
• Palantir Technologies is highlighted as a top AI stock, demonstrating a 40% annual revenue increase and an 80.81% gross margin with its AIP platform.
• Market analysts like Michael Burry warn of a potential AI chip bubble, citing short GPU lifespans and possible profit overstatements by companies.
• Economist Ed Yardeni advises buying AI stock dips, noting strong S&P 500 profit growth of 14% year-over-year.
• Microsoft-backed AI chip startup D-Matrix recently raised $275 million in new funding.
• Worldwide spending on AI is projected to reach $1.3 trillion by 2029.

SoftBank shares drop after selling Nvidia stake for OpenAI

SoftBank Group's shares fell by up to 10% after it sold its entire stake in Nvidia for $5.83 billion. The company sold 32.1 million Nvidia shares in October. SoftBank plans to use this money to fund its $22.5 billion investment in ChatGPT parent OpenAI. SoftBank also sold some T-Mobile shares, raising an additional $9.17 billion. This move shows SoftBank's focus on AI, especially through its investment in OpenAI and its stake in British chip designer Arm.

SoftBank sells Nvidia stake to boost OpenAI investment

SoftBank Group sold its entire 32.1 million Nvidia shares in October for $5.83 billion. The company will use this money for its $22.5 billion investment in OpenAI. This decision is not due to worries about AI stock values, but rather to focus on AI. Meanwhile, AMD expects 35% annual growth driven by high demand for AI chips. "Big Short" investor Michael Burry has warned about AI valuations, but SoftBank is moving forward with its AI plans.

SoftBank sells Nvidia stake for AI investments

SoftBank Group's shares dropped by as much as 10% after it announced selling its entire stake in Nvidia. The company made this sale to fund its large investments in artificial intelligence. SoftBank plans to invest $22.5 billion in OpenAI, acquire Ampere Computing for $6.5 billion, and buy ABB's robotics division for $5.4 billion. SoftBank's CFO Yoshimitsu Goto addressed concerns about a market bubble during the company's quarterly earnings call.

AI stock growth slows amid market concerns

Analysts at Morgan Stanley warn that the current AI stock boom might be slowing down. They compare it to the dot-com bubble, noting that many AI companies are growing fast without clear profits. Concerns are also rising about "ghost job" listings, which can make the job market seem better than it is. Former President Donald Trump suggested giving consumers rebate checks funded by tariffs. Investors are also worried about market changes due to the Federal Reserve keeping interest rates high and ongoing global conflicts.

Market faces AI slowdown and job listing concerns

The Nasdaq Composite did not join the broader market's gains, and some investors like Michael Burry are questioning the AI trade. "Ghost job" postings are making the labor market picture unclear, as these listings often stay online even after positions are filled. Former President Donald Trump proposed giving Americans tariff rebate checks, possibly a $2,000 dividend, though experts warn this could cause inflation. Meanwhile, the Senate Agriculture Committee released a draft bill to regulate the crypto industry. AMD's stock recovered after hours, and Oura's CEO expects $2 billion in sales by 2026.

Economist Ed Yardeni advises buying AI stock dips

Economist Ed Yardeni suggests investors should buy AI stocks when their prices drop. He believes current market worries about AI are a healthy sign, unlike the dot-com bubble where few saw a crash coming. Yardeni noted that cloud providers are making a lot of money from AI applications. He also points to strong corporate earnings, with S&P 500 profits growing 14% year-over-year, much higher than expected. Yardeni maintains his year-end S&P 500 price target of 7,000, seeing a bull market ahead.

Hancom reports strong profit from AI software sales

Hancom, a software company from South Korea, announced a third-quarter operating profit of 12.3 billion won, which is about $9 million USD. This significant increase in profit comes from strong sales in its artificial intelligence businesses. The company has been investing in and developing AI technologies, which are now bringing in a lot of money. Hancom plans to grow its AI products and market presence even more in the future.

Palantir Technologies is a top AI stock for the future

Palantir Technologies is highlighted as a leading artificial intelligence stock with strong growth potential for the next decade. Its AI platform, AIP, helps businesses become more efficient and save millions of dollars. Worldwide spending on AI is expected to reach $1.3 trillion by 2029, showing a huge market. Palantir's rapid growth and high 40% annual revenue increase make it an attractive long-term investment. The company also boasts an impressive 80.81% gross margin, indicating its strong financial health.

OpenAI could go public with a trillion dollar value

OpenAI, the company behind ChatGPT, is a key player in the artificial intelligence industry and could go public with a valuation of up to $1 trillion. CEO Sam Altman leads the company, which has an annualized revenue run rate of $20 billion and aims for hundreds of billions. OpenAI is integrating services like DoorDash and Figma into ChatGPT and plans its own web browser, Atlas. The company is currently valued at $500 billion in private sales but is losing money due to massive investments, including $1.4 trillion for data centers.

Litmus gains new investment for industrial AI growth

Litmus, a leading Industrial Edge Data Platform, received a significant new investment from Insight Partners. This funding will help Litmus speed up its work in industrial artificial intelligence. The company's platform helps industrial businesses collect, understand, and analyze data from their machines in real time. CEO John Furrier stated the capital will accelerate product development and global reach. Insight Partners' Deven Parekh noted Litmus addresses a critical need for data integration in industrial settings.

AI chip market faces bubble warnings despite growth

Investors like Michael Burry are warning of a possible AI chip bubble, citing the short lifespan of GPUs and risky financing. Burry claims companies might be overstating profits by using longer depreciation periods for hardware that quickly becomes outdated. He estimates a $176 billion understatement in depreciation between 2026 and 2028 for some tech giants. Despite these concerns, the market remains optimistic, with AMD forecasting over 35% annual growth in its AI data center business. Additionally, Microsoft-backed AI chip startup D-Matrix recently raised $275 million in new funding.

Attentive.ai raises 30.5 million for construction AI

Attentive.ai secured $30.5 million in Series B funding, led by Insight Partners, to boost its AI innovations in construction. The company's Beam AI platform helps over 1,100 construction companies by automating preconstruction tasks like takeoffs. This technology reduces manual work and allows teams to focus on strategy, speeding up the bidding process. CEO Shiva Dhawan stated the funding will accelerate AI model development and product innovation across the entire preconstruction process. Nikitas Koutoupes of Insight Partners praised Attentive.ai's advanced AI and customer-focused approach.

AI investments drive chip and tech stocks higher

Chip and tech stocks rose as major companies announced significant artificial intelligence investments. The Philadelphia Semiconductor Index climbed 1.3%. Nvidia plans to invest $1 billion in a new AI-powered data center in northern Mexico. Amazon-backed Anthropic committed $50 billion for US computing infrastructure, including new data centers in Texas and New York. AMD's stock jumped 8.6% after sharing strong long-term goals for data centers and gaming. Clearwater Analytics also saw its shares rise 7.3%, and Appian gained 3% after launching new AI features.

Sources

• SoftBank shares plunge as much as 10% after selling Nvidia stake
• CNBC Daily Open: SoftBank doubles down on AI amid warnings from 'Big Short' investor
• Masayoshi Son No Longer Asia’s 3rd Richest—After Softbank Sells Nvidia Stake
• AI trade stalls, 'ghost job' listings, Trump floats tariff rebate checks and more in Morning Squawk
• AI trade stalls, 'ghost job' listings, Trump floats tariff rebate checks and more in Morning Squawk
• Ed Yardeni Says 'Buy The Dip' In AI Stocks, Calls Market Nervousness Healthy Sign - SPDR S&P 500 (ARCA:SPY)
• Hancom posts 12.3 billion won operating profit as AI sales drive growth
• What Is One of the Best Artificial Intelligence (AI) Stocks to Own for the Next 10 Years?
• Meet the Supercharged Company Fueling the Artificial Intelligence Revolution That One Day Could IPO at a Market Cap of $1 Trillion
• Litmus Secures Additional Investment Led by Insight Partners to Accelerate Industrial AI
• Investors warn of AI chip bubble as AMD and D‑Matrix keep the boom alive
• Attentive.ai Secures $30.5 Million Series B to Accelerate AI Innovation in Construction
• Chip Stocks Climb As AI Investments Make Headlines