Daybreak - SoftBank’s Nvidia move amid the AI frenzy is bringing India’s measured growth into view

Episode Date: November 12, 2025

SoftBank just sold about $5.8 billion worth of Nvidia shares earlier this week. The move frees up cash for new AI bets and comes as AI stocks power most of this year’s market rally. Nvidia���s rise has been spectacular but so have the warnings about overheating. Some analysts see a rotation coming: money could move from pricey tech giants to steadier markets. And that’s where India enters the picture. It’s grown slower, but on stronger fundamentals like broad demand, digital momentum, real earnings. The question now is simple: when the AI fever cools, can India keep its calm?Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcast, you've probably heard me. My interruptions, my analogies and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganesh, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

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Picture the trading floors of this year. Screens glowing green, numbers jumping so fast that they almost blur. Every few weeks, another record. Invidia, the chip maker whose processors power many of the cutting-edge AI systems around the world became one of the most valuable businesses in history. Its valuation is close to hitting $5 trillion. Tech indexes are truly breaking ceilings this year. Investors naturally are calling it the AI century.

It feels a bit like deja vu. You know, the dizzy mix of innovation and euphoria that markets tend to get every couple of decades. Little like the dot-com revolution. Everyone is chasing the same story. Chips, servers and the promise that are, artificial intelligence is going to change everything. And then, a headline lands that puts everything under question for a moment. Two days ago, one of the world's boldest tech investors took a step back.

SoftBank Group, the Tokyo investor whose bets have helped define the last decade of technology investing, sold its stake in Nvidia for nearly $6 billion. dollars. But if you thought that SoftBank was stepping away from artificial intelligence, you would only be half right. In fact, it is doubling down, shifting resources into software, AI platforms and companies that use those chips instead. In fact, SoftBank and Invidia still have strong relations. Many ventures that SoftBank invests in uses Nvidia technology. So in a nutshell, The softbank is taking money out of the machines that build AI and putting it into the minds that use it. Into open AI, robotics and other new software ventures.

Basically, into the next layer of the AI story. The stake sale then seems to be part of a strategic move. But could this be a signal of some sort? Has something shifted? And has the hype outrun reality? You see, critics are already pointing out how stock prices of tech giants have soared too high and too fast in the mania that is around AI. And they are drawing comparisons to the 2000.com bubble that ultimately burst. So the question then is, where does all this restless money go next?

Some analysts think they know. And they are pointing to a market that hasn't been swept up in the AI mania, one that is growing slower, steadier and more structurally. India. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Dha Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Vargis and I will come to you with one business story that is worth understanding and worth your time.

Today is Thursday, the 13th of November. So, let's zoom out for a bit. Because the soft bank story only makes sense, when you see the kind of world it is reacting to. This has been the year of AI-driven markets. A handful of tech companies have pulled the world's stock indices upwards. Nvidia, most of all. Its chip run inside many of the large language models

that dominate the AI conversation. As demand for those processors exploded, Nvidia's sales and profits did as well. Between early 2024 and 2025, Nvidia's market value jumped past $4 trillion and briefly approached $5 trillion. Not long ago, this was a number that was thought impossible for a semiconductor company. But, Nvidia is not alone.

The so-called Magnificent Seven, which is Apple, Microsoft, Alphabet, Amazon, Meta, Tesla and Nvidia had together added trillions of dollars to global market capitalization this year. Bloomberg's market trackers estimate that roughly two-thirds of the S&P 500, gains in 2025 came from this small group of AI-linked firms. This concentration has made some investors uneasy, because history shows what happens when too few stocks carry too much of the load. The late 1990s.com surge, the 2021 crypto run, when optimism and liquidity combined, valuations can drift far ahead of earnings.

And that is the backdrop against which SoftBank made this move. It said it wanted to free cash to invest in other parts of the AI ecosystem, software, model developers, and robotics. And this is quite consistent with how Masayoshi Son operates. He's often tried to move ahead of the curve, funding mobile internet before smartphones, betting on chip designer ARM before the internet of things wave, and now repositioning within AI.

At roughly about the same time, Nvidia and Open AI also announced a strategic partnership that includes plans to build up to 10 gigawatts of Nvidia-powered data center capacity. This project, valued by company filings at around 100 billion US dollars in total infrastructure spending, is meant to scale Open AI's computing power for the next generation of models. Now, if you put these pieces together,

you can see two different realities existing side by side. On one hand, the fundamentals behind AI remain powerful, global firms are still investing enormous sums of money to expand capacity. And on the other hand, capital markets are showing classic signs of overheating, huge concentration, relentless price momentum, and investors searching for what comes next. That tension is why economists have begun to use an uncomfortable phrase again. Bubble risk. Not a certainty, but a concern. The same Reuters dispatch that covered soft bank's sale carried analysts warning that valuations in AI hardware had soared too high and too fast.

And if that is true, if we are somewhere near the top of an extraordinary run, the next question becomes, where does the money go when it starts to cool? That is where a new threat enters the story. Because while the rest of the world has been surfing the AI wave, one big market has been more than more than. moving differently. It is slower, steadier and less speculative. More on this in the next segment. So if the air starts thinning at the top of the AI rally, where could the money go? That is the question that market strategists have been wrestling with for the last few weeks. And increasingly, one answer keeps coming up. India. And it's not because India is at the center of the AI mania, but because it isn't.

Here is what analysts are saying. A Bloomberg report published earlier this month noted that if the AI trade begins to unwind, if investors start taking profits from expensive U.S. and Japanese tech stocks, some of that capital could flow into emerging markets with broad-based structural growth. India was the first name on that list. Why? Because India's rally this year has not been a single headline technology. It's been driven by domestic demand.

infrastructure spending and steady earning growth in sectors like finance, energy and manufacturing. And that is the opposite of a bubble dynamic. Analysts at Macquarie and HSBC have put it simply. India's growth is structural and not speculative. The market has, in fact, lagged the global AI surge, largely because India does not have any pure play AI giants like Nvidia or Microsoft. But that absence could now become an advantage. It means that Indian valuations were not inflated by the same euphoria.

And that makes the market look safer to international investors looking to rebalance. HSBC's latest emerging markets note calls India a key diversification play away from crowded AI holdings. In a recent NDTV profit interview, Macquarie's Sandeep Bhattier put it even more bluntly. He said, if the AI bubble bursts, India could actually benefit. In practice, this could mean two things. First, global investors may rotate capital from overheated tech indexes to Indian equities, looking for growth that feels real and repeatable. Second, India's own AI ecosystem, which are companies supplying AI in finance, logistics and languages,

could attract strategic investment as global firms look for scalable, lower cost markets. So while SoftBank and others are re- aiming their bets from chips to applications, analysts see India as the place where those applications could scale. It's not about chasing the hype, it is about being the next safe harbor when the storm of speculation starts to settle. And that brings us to the other side of this argument, because not everybody agrees that this rotation will be smooth or even guaranteed.

More on this in the next. segment. It is a great story, the idea that when the AI bubble cools, India could quietly become the biggest beneficiary. But every good story deserves a reality check. Because for this to really happen, many gaps need closing. Starting with hardware. India does not yet make high-end chips that drive AI. Projects like Micron's new facility in Gujarat are a start, but the country is years away from large-scale semiconductor manufacturing. And then there is infrastructure. AI needs steady power and massive data center capacity. India's grid and energy costs are improving, but still inconsistent. Running large-scale computing sustainably is tough even for

advanced economies. The ecosystem gap is also very real too. India has great engineers and software forms, but limited original AI research. Most innovation happens in applied use cases, not in building core models. And remember, India is still a part of the global risk basket. When investors panic, money often leaves emerging markets first. Last year, foreign portfolio investors pulled out billions even as domestic funds kept buying. Valuation is another hurdle, because Indian stocks already trade at a premium, roughly 22 to 24 times forward earnings.

And that leaves little room for disappointment. So, yes, India does have the ingredients which are growth, digital scale and reform momentum, but to truly become the world safe harbor, it needs deeper innovation, stronger infrastructure and a bigger role in the global tech supply chain. Markets reward delivery, not potential. And India's challenge now is to prove that it can build the future that it is. is promising. Daybreak is produced from the newsroom of the Ken,

India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague, Snitha Sharma, and edited by Rajiv CN.