In the volatile world of tech investments, even the most seasoned investors occasionally find themselves on the wrong side of a major market move. Masayoshi Son, founder of SoftBank Vision Fund and one of the world’s most influential tech investors, recently shared a poignant example of this reality.
Despite his impressive track record, Son missed out on what could have been his most lucrative investment—Nvidia.
The Painful Sale
Years ago, Son held a substantial 5% stake in Nvidia, the company now at the forefront of the AI revolution. Today, this stake would be valued at an astonishing $160 billion.
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Nvidia had been thriving by selling graphics cards to cryptocurrency miners. The company was experiencing a period of financial prosperity, with demand for its products surging due to the cryptocurrency boom. However, this period of rapid growth was followed by a sharp decline.
Nvidia CEO Jensen Huang referred to this abrupt downturn as a prolonged “hangover.” The sentiment in the market shifted dramatically, leading to a steep 50% drop in Nvidia’s value over just four months. This rapid devaluation created a challenging environment for investors, including Son.
Reacting to this unexpected and severe drawdown, Son decided to sell SoftBank’s shares in Nvidia. The shares, worth less than $4 billion then, were sold to protect his fund’s performance. In hindsight, this move proved premature, as Nvidia’s value and prospects recovered over time.
“I had to tearfully sell the shares,” Son revealed to SoftBank shareholders at the firm’s annual meeting, according to the Wall Street Journal. “The fish that got away was big.”
Had Son held onto his Nvidia shares, the value would have far exceeded his legendary investment in Alibaba, which saw a $20 million investment grow to $60 billion by the time the e-commerce giant went public.
Nvidia has since emerged as the most valuable company in the world, riding the wave of AI advancement. Its GPUs are crucial for AI applications, data centers, and autonomous technologies. Nvidia’s strategic shift from a focus on gaming to AI and data centers has propelled its market value, solidifying its position as a cornerstone of modern technology infrastructure.
SoftBank Vision Fund – A Mixed Bag
The SoftBank Vision Fund, under Son’s leadership, has experienced both significant successes and notable missteps. Launched with a bold $100 billion, the fund aimed to revolutionize tech investment. It backed major companies like Uber and Slack, and controversially, WeWork. Nvidia was among its early investments, thriving initially on sales to crypto miners before a severe downturn slashed its value by 50% within four months.
In February 2019, SoftBank disclosed it had exited its Nvidia position entirely, recovering around $3.6 billion. The decision, while understandable given the circumstances, meant missing out on the subsequent explosive growth of Nvidia’s stock.
“It’s frustrating to remember the ones that I missed,” Son admitted.
Focus on the Future with The Izanagi Fund
Undeterred by past missteps, Son is now channeling his efforts into a new $100 billion fund dedicated to artificial superintelligence (ASI). Named after the Shinto god of creation, Izanagi, this fund reflects Son’s grand vision for the future. While details remain sparse, Son assured that the fund’s scope and ambition would be as monumental as its name implies.
“I seriously believe the reason why Masayoshi Son was born is to make ASI come true,” he said, speaking with confidence.
Attempting to time the market can sometimes be costly for investors — and in the case of SoftBank founder and CEO Masayoshi Son, the price tag comes to $150 billion. That’s how much Son missed out on after selling a stake in Nvidia in 2019, more than five years before the AI chip-making powerhouse surged to briefly become the world’s most valuable public company, according to The Wall Street Journal. But it wasn’t all bad news. Selling the 4% stake netted Softbank a $3.3 billion return. Still, Son refers to the sale as “the fish that got away.”