SoftBank, one of the world’s most prominent technology investors, has placed astronomical bets on the future of artificial intelligence. On Tuesday, it said Nvidia is no longer one of them.

Japanese billionaire Masayoshi Son’s firm sold its entire stake in the chipmaker at the heart of the AI boom, totalling 32.1 million shares, for $5.8 billion last month. The news reignited concerns among some investors about an AI bubble, but SoftBank said it was merely realigning its bets on the sector.

Attached at the Chip

CFO Yoshimitsu Goto said on an earnings call that SoftBank’s divestment had “nothing to do with Nvidia itself.” Nvidia has, in fact, consistently beaten analyst expectations, including in its latest quarterly report, and Citi hiked its price target for the semiconductor firm to $220 on Monday, suggesting the highly valued stock still has a 17% upside. SoftBank’s US-traded depository receipts rose 2.6% Tuesday, while Nvidia shares fell 3%.

Goto emphasized that the fresh capital from its divestment will bankroll other AI investments, namely an “all-in” bet on ChatGPT’s OpenAI. To finance its needs, Softbank also sold $9.2 billion worth of its partial stake in T-Mobile, and Son has unwound other positions to back his firm’s leading priorities. Softbank has also cashed out of Nvidia before, the last time in 2019, not long before the chipmaker began its meteoric rise. But given how firmly entrenched Nvidia is in the AI ecosystem, the two companies can hardly avoid each other:

• Along with OpenAI, Oracle and MGX, SoftBank is part of the joint $500 billion Stargate venture building AI infrastructure in the US; Nvidia is one of the initiative’s technology partners. Meanwhile, SoftBank’s sale of Nvidia shares helps finance an investment of up to $40 billion in OpenAI, which has pledged to invest up to $100 billion in Nvidia.
• Son’s other AI ambitions include a $1 trillion Arizona manufacturing hub, the $5.4 billion acquisition of ABB’s robotics unit, and a portfolio with TikTok-owner ByteDance and Perplexity AI. SoftBank and Nvidia stand to benefit if Big Tech firms follow through on pledges to spend hundreds of billions to fund the AI boom in the coming years.

Burry-ied in the Details: The doubters’ ranks are growing. On Tuesday, analysts at the Wells Fargo Investment Institute downgraded the S&P 500 Information Technology sector to neutral from favorable, citing high valuations. A day earlier, famed “Big Short” investor Michael Burry accused Big Tech “hyperscalers” of “artificially” boosting their earnings by “understating” the depreciation expenses of the semiconductors they’re buying. “By my estimates, they will understate depreciation by $176 billion [from] 2026-2028,” he wrote in a tweet.

What do airline pilots have in common with Federal Reserve policymakers? Both risk flying blind because of the government shutdown.

While a stopgap funding deal is officially in place and will likely be signed, sealed, and delivered by the end of the week, the government still has some work to do to fill in its backlog of missing economic data from September and October that would have been published already were it not for the longest shutdown in US history. Whether the catch-up will be complete before the Fed’s interest-rate committee holds its final meeting of the year, scheduled for December 9 and 10, remains an open question. As if Chair Jerome Powell’s life weren’t complicated enough.

Late Work Policy

Assuming the government reopens by week’s end, analysts at Goldman Sachs wrote in a note to clients seen by CNBC on Tuesday that the Bureau of Labor Statistics will likely release its September jobs report, which was initially scheduled for early October, by Tuesday or Wednesday, but is expecting delays for the October jobs report, as well as key spending and inflation reports from the Commerce Department.

Meanwhile, Morgan Stanley Chief Economist Michael Gapen told Barron’s on Tuesday that the October and November jobs reports could be released on December 8, just before the Federal Open Market Committee meeting, a projection based on what happened after the 2013 government shutdown.

In other words, Powell and company could be left a bit in the dark. That might only exacerbate the committee’s existing tension:

• After the Fed’s October meeting, Powell stressed that “strongly differing views” remained among members, though he added that there appeared to be a “growing chorus” to “at least wait a cycle” before cutting rates again.
• On the other hand, Fed Governor Stephen Miran said Monday that signs of a softening labor market and falling inflation could be grounds for a 50 basis-point cut in December. According to CME Group’s FedWatch tool, traders see a 67% chance of a quarter-point cut.

The Big Picture: At present, the Atlanta Fed’s GDPNow tracker predicts that third-quarter data will show US GDP growth of 4%, while Goldman predicts fourth-quarter GDP growth of 1.3%. That would put the US on pace for 2% GDP growth for the year, down slightly from 2.8% last year. Among those not worried about a slowdown? C-suite types, who have mentioned “economic slowdown” the least number of times this earnings season since 2007, according to a recent Bloomberg analysis. At least someone has their anxiety under control these days.

Morgan Stanley analysts were not about to be left out of Wall Street’s private market gold rush as companies with mind-boggling valuations like OpenAI and SpaceX put off public listings.

On Tuesday, the investment banking giant launched a landing page within its research portal dedicated exclusively to private companies, according to an internal memo sent out by the firm’s global director of research, Katy Huberty, and shared with The Daily Upside. The page will “spotlight the innovators and trends that are reshaping traditional business paradigms and serve as a central hub for clients to access all our private industry research in one place,” the memo said.

Morgan Stanley has been publishing research on private markets since 2017, but it will now expand coverage to deliver deeper analysis and broaden its reach as client interest in unlisted firms grows.

Unicorns Galore

There are currently more than 1,500 active unicorns, privately held startups valued at more than $1 billion, that have raised roughly $1 trillion in venture capital funding, according to data compiled by PitchBook. So it’s no wonder that providing clients with insights into what these companies are up to is becoming a top priority.

In addition to the page launch, two of Morgan Stanley’s analysts who previously focused on public companies have jumped over to digging in on private ones, Bloomberg reported. And at the end of last month, the company announced plans to acquire private shares platform EquityZen.

Morgan Stanley is hardly the first investment research heavyweight to realize that investors are eager for a behind-the-scenes look at how private companies with soaring valuations are faring:

• JPMorgan Chase expanded its research to cover private companies in July. Citigroup followed suit just days later.
• Just last week, Charles Schwab announced it was buying Forge Global Holdings, a private market platform and trading marketplace, for $660 million.

Just the Beginning: “Both institutions and wealth management markets are looking for wide-scale research coverage of the alternative asset management industry and key industries such as private equity, private credit, real estate and energy infrastructure asset classes,” says Ken Leon, director of equity research at investment research firm CFRA. “There will be more firms to follow.”