SoftBank Group has sold its entire stake in Nvidia, the world’s most valuable chipmaker, raising questions about whether the artificial intelligence (AI) boom has reached unsustainable heights. The Japanese conglomerate offloaded roughly 32 million Nvidia shares, worth about $5.8 billion, in October, according to its latest earnings disclosure.The move comes even as Nvidia remains the biggest winner of the AI surge, with its valuation crossing a record $5 trillion this year on the back of soaring demand for its graphics chips that power AI models like ChatGPT. SoftBank said the sale was not a reflection on Nvidia’s prospects but part of a plan to “reallocate capital” towards new AI ventures — especially OpenAI and large-scale infrastructure projects such as its proposed “Stargate” data centre initiative.SoftBank’s chief financial officer Yoshimitsu Goto told reporters that the group wanted to “take advantage of its gains” and free up funds for fresh bets in the AI ecosystem.Still, the timing of the sale has triggered speculation that SoftBank may see limited upside left in Nvidia’s meteoric rise. Nvidia shares have tripled in value over the past two years, making it the poster child of the AI stock rally. Analysts say SoftBank’s exit could signal growing unease about overheated valuations.Market watchers say the move also highlights a shift within the AI investment landscape — from hardware and chipmakers toward platforms, software, and infrastructure. By cashing out of Nvidia and doubling down on OpenAI, SoftBank appears to be repositioning itself from a chip investor to a broader ecosystem player.For investors, the sale underscores a key tension in today’s AI markets: whether the rapid rise in company valuations truly reflects their future earnings potential or simply investor exuberance. Nvidia continues to deliver record profits, but many now question how long the momentum can last.Nvidia’s says China may ‘win’ AI raceLast week, Nvidia CEO Jensen Huang warned that China could overtake the US in the race for artificial intelligence (AI) because of its cheaper energy costs and fewer regulations.Story continues below this ad“China is going to win the AI race,” Huang told the newspaper on the sidelines of the Financial Times‘ Future of AI Summit. FT reported that the Nvidia chief said that the West, including the US and UK, was being held back by “cynicism,” singling out new rules on AI by US states that could result in “50 new regulations”.He added that one key challenge to the chipmaker comes from the Chinese approach of offering energy subsidies to domestic companies, which makes it more affordable for them to run Chinese alternatives to Nvidia’s AI chips.Huang later softened his stance, saying that “China is nanoseconds behind America in AI. It’s vital that America wins by racing ahead and winning developers worldwide”.As Nvidia has become perhaps the most important company at the heart of the AI gold rush, the company fears that geopolitical tensions between the US and China, resulting in export control orders, could hurt it as it risks losing access to a vast pool of AI developers in China. It is undeniably a massive market for Nvidia, and could further boost its ever rising stock price.Story continues below this adIn October, the head of Nvidia, the world’s leading maker of AI chips, said the US could win the global race in artificial intelligence if developers worldwide — including those in China — continue to use Nvidia systems. However, he noted that China’s government has blocked the company from its market.China’s limited access to advanced AI chips from Nvidia has become a key point of tension in its tech rivalry with the US, as both countries compete for dominance in high-end computing and artificial intelligence.AI investment frenzy in the USAs Nvidia finds itself caught in the crosshairs of the ties between the US and China, an investment frenzy in the AI space has gripped the United States, as large corporations throw their weight and money behind AI companies.Amazon recently signed a multi-year agreement worth $38 billion with OpenAI under which the e-commerce company will provide the ChatGPT maker access to hundreds of thousands of Nvidia processors to train and run its artificial intelligence models. In March, Amazon had invested $4 billion in Anthropic, doubling its investment in the OpenAI competitor.Story continues below this adLast month, AMD said it will supply artificial intelligence chips to OpenAI as part of a multi-year deal, and give the ChatGPT creator the option to buy up to roughly 10% of the chipmaker.In September, Nvidia announced that it will invest up to $100 billion in OpenAI, supply it with data center chips, and take a financial stake in the AI company. OpenAI is already among Nvidia’s most important customers.Nvidia is also investing $5 billion in its struggling rival Intel, and the two will work to develop personal computers and data centre chips.OpenAI is reported to have signed a deal with software giant Oracle to purchase $300 billion in computing power over roughly five years. OpenAI, Softbank, Oracle, Microsoft and Nvidia are coming together to build artificial intelligence (AI) infrastructure for OpenAI in the country. An investment of $500 billion is expected to be made in a new company — Stargate Project — to fuel this expansion over the next four years.