Why Nvidia Remains ‘Undervalued’ in the Race Toward an AI-Powered Future

As artificial intelligence redefines the tech landscape, SoftBank CEO Masayoshi Son believes Nvidia remains undervalued, the chip-making giant driving much of today’s AI advancements. With the potential for a "superintelligence" future on the horizon, Son envisions Nvidia’s role—and the investments in AI as a whole—as only beginning to realize their true worth. His remarks, delivered at the Future Investment Initiative (FII) conference in Riyadh, reveal his confidence that AI spending will skyrocket, solidifying Nvidia’s essential role in the coming AI era.

During the conference, Son emphasized that artificial superintelligence could surpass human intelligence by 10,000 by 2035. This vision, while ambitious, is one Son believes requires massive financial backing—up to $9 trillion in AI spending—predominantly to be channelled into hardware, computing power, and other advanced technology that Nvidia is perfectly positioned to provide. “The future is much bigger,” Son asserted. Nvidia’s estimated $30,000 to $40,000 chips are vital for the AI tools and models developed and refined by companies like OpenAI, Google, and Amazon.

SoftBank’s $500 million investment in OpenAI earlier this year underscores this ambitious investment projection, which values the ChatGPT creator at $157 billion. SoftBank has also increased its focus on AI investments through its 90% ownership of Arm Holdings, which is slated to launch its AI chips next year. This strategy aligns with Son’s conviction that the AI boom is far from an economic bubble; instead, he views it as an opening act to a far more transformative era. If even a tiny fraction of global GDP—about 5%—is managed or replaced by artificial superintelligence within the next decade, Son calculates it could yield $4 trillion in annual profits.

Nvidia’s rise has already been remarkable. Despite a valuation exceeding $3 trillion, Son feels its stock is still “undervalued” in the grander context of AI-driven growth, significantly as the world’s tech giants ramp up their AI investments. Microsoft, for instance, has invested $13 billion in OpenAI, while Amazon has committed $4 billion in its partnership with Anthropic. With demand surging for AI tools and data processing, Nvidia’s GPUs continue to be the technology of choice for powering these advanced computations, solidifying its position as the preferred chipmaker.

Son’s admiration for Nvidia is well-documented but tinged with some regret. SoftBank once held a 4.9% stake in Nvidia, which it sold in 2019 for $4 billion—a stake that would be worth over $160 billion today. Son has since lamented this sale, calling Nvidia "the fish that got away." Nvidia's ongoing success, fueled by the insatiable demand for AI-powered solutions, reinforces the lesson that AI-driven investments are not only strategic but essential for those aiming to shape the technological future.

The excitement around AI, however, is not without skepticism. The rapid rise in spending on AI by Big Tech companies has led some investors to wonder if the market can sustain these levels indefinitely. As Nvidia’s earnings report approaches, analysts and investors alike are eager to see concrete indicators that AI investments drive actual returns. With Microsoft, Google, Amazon, and Meta alone projected to spend over $185 billion on AI this year, Nvidia’s performance could very well provide an answer to these questions.

Masayoshi Son’s bold predictions at the FII conference reinforce his steadfast belief that AI is the future and that companies like Nvidia are at the core of this revolution. As technology edges toward superintelligence, Son’s vision of an AI-powered future, with Nvidia as a linchpin, continues to inspire and challenge industry leaders worldwide.

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