(BSS/AFP) - Shares in SoftBank Group plunged as much as 10 percent on Wednesday after the Japanese tech investor said it had sold all its stock in US chip titan Nvidia for $5.8 billion.

Analysts said the move was to free up cash to pay for massive investments in AI promised by SoftBank`s charismatic founder Masayoshi Son, including in US megaproject Stargate.

Shares in Nvidia, whose cutting-edge processors are used to train and run artificial intelligence models, fell three percent in New York.

Optimism over the promise of AI technology has sparked a rush of multi-billion-dollar deals, sending tech shares soaring.

Wall Street`s tech-rich Nasdaq index has surged 25 percent since May -- leading to concerns of a market bubble that could burst.

"The sale is a sign of Son`s desperation to finance his commitment to OpenAI CEO Sam Altman," wrote Martin Peers, at specialist tech news site The Information.

SoftBank is a major investor in ChatGPT creator OpenAI.

"He is scouring the proverbial cushions on SoftBank`s couch for spare change," he said, noting that "the Nvidia stake was, indeed, the equivalent of pennies."

SoftBank, OpenAI and cloud giant Oracle are jointly leading the $500 billion Stargate project to build AI infrastructure in the United States announced by President Donald Trump in January.

SoftBank`s shares were trading down 5.4 percent in mid-morning trade Wednesday, having lost as much as 10 percent soon after the open.

The company had reported on Tuesday that net profit more than doubled in the second quarter to a colossal 2.5 trillion yen ($16.2 billion) thanks to booming AI shares.

Chief financial officer Yoshimitsu Goto said the decision to sell Nvidia shares was taken "so that the capital can be utilised for our financing", without elaborating, Bloomberg News reported.

"I can`t say if we`re in an AI bubble or not," he said.

Mary Pollock of CreditSights noted the "strong business case" for generative AI technology and "OpenAI`s unique position in the industry today".

But "while the picture today is rosy, the risk that AI valuations are frothy cannot be disregarded", she warned after SoftBank`s earnings release.

"It is far from certain that confidence in AI`s value proposition, the timeline by which revenues are achieved, and investors` expectations for growth all continue to evolve in-step."