Peter Thiel Is Reportedly Dumping Nvidia Stock Amid AI Bubble Jitters

Peter Thiel is the latest investor to sell off Nvidia shares.

According to regulatory filings, the billionaire’s hedge fund, Thiel Macro, has offloaded its entire stake in Nvidia. The firm has sold 537,742 shares in its third quarter, which would have been worth around $100 million, according to Reuters estimates.

There are many reasons why investors might decide to sell off their stake in a company, and not all of those reasons are worth giant alarm bells. But it does pique interest when those stakes belong to the world’s most valuable company, and the decision comes mere days after another high-profile investor selloff.

Just last week, prominent Japanese investor SoftBank shared that it sold its entire stake in the chipmaker. The firm said that it raked in $5.83 billion from the sale of 32.1 million Nvidia shares in October. The sale was apparently made to fund a multibillion-dollar investment in OpenAI, on top of the billions the firm has already invested in the tech giant. SoftBank and OpenAI are also partners under the Trump-backed data center build-out plan known as Stargate.

Nvidia is considered the ultimate AI darling. It’s a company that hit $5 trillion market value by riding the AI wave, and it holds a central position in the industry as the primary global supplier of highly coveted AI chips. As a result, any perceived distrust in Nvidia’s trajectory is taken as a negative sign for the AI industry overall.

It’s not entirely certain what Thiel and SoftBank’s sell-offs confidently signal about overall investor sentiment regarding artificial intelligence, and whether or not there is indeed an AI bubble, but it sure is adding on top of readily existing worries, and making people feel queasy.

Over the past few months, a growing chorus of experts, from the Bank of England to investor Michael Burry of The Big Short fame, have been warning against an AI bubble that could bring not just the market but possibly the entire American economy down with it if it bursts.

Companies, like Nvidia, have hit record valuations as investors are delighted by the potential gains that AI represents. But some believe that investor appetite is FOMO-driven and could be artificially inflating the actual value of these companies. Even some top tech executives like Sam Altman and Jeff Bezos have admitted to overvaluation. So what happens when that investor appetite just stops?

All eyes are now on Nvidia’s earnings report later this week to shed more light on whether the news from the past week is part of a newly forming trend that warrants worry or just a fluke. The tech giant will be reporting third-quarter earnings results after the bell on Wednesday.