A regulatory filing has revealed that in Q3 2025 Peter Thiel
offloaded all his AI stocks. The move – coupled with
SoftBank's selloff of its own Nvidia holdings – is fuelling speculation that the tech industry is due an uncomfortable correction.
So, who is Peter Thiel, and why did he sell all his Nvidia stocks? In this instalment of Finextra’s Explainer series, we take a look at the tech billionaire’s divestment from AI and what it means for the industry.
Who is Peter Thiel?
Peter Thiel is a German-American entrepreneur, venture capitalist, and political activist. In 1998 he cofounded PayPal with Max Levchin, which was
sold to eBay in 2002 for $1.5 billion. Thiel was the first outside
investor in Facebook and has a long history of backing successful tech innovators.
Today, he is perhaps best known for chairing the software and services company, Palantir Technologies, which supplies data integration and AI software platforms to a raft range of intelligence, defence, and civil agencies, as well as private firms across
aviation, energy, healthcare, and manufacturing. Against a backdrop of rising geopolitical tension, this work has handed Thiel an immense level of
influence.
In short, Thiel is not just another member of the tech industry – he is actively shaping its future.
Where things get really interesting is his investment business. As of 2025 Q3 the hedge fund Thiel Macro LLC held nearly
$74.4 million in long US stocks, which, according to Yahoo! Finance is down from $212 million in Q2. It was through this fund that Thiel divested from AI – signalling to the markets that he believes AI cannot deliver on its economic promise.
According to the filing with the Securities and Exchange Commission (SEC), the main holdings of Thiel's fund are now
Apple, Microsoft, and a reduced Tesla.
What is Nvidia?
Nvidia is an American tech behemoth that designs and manufactures the chips needed to power artificial intelligence (AI) models. Between July and September 2025, Thiel Macro sold its entire stake in Nvidia – amounting to
537,742 shares, worth around $100 million.
Because Nvidia sits at the
centre of the tech sector, its financial health acts as a bellwether for how AI demand will evolve. Investors and analysts are eager to run a fine-tooth comb through the chip manufacturer’s Q3 results to inform their next moves.
It is too early to say whether Thiel’s stance on Nvidia is ahead of the curve or simply misguided. At least in terms of Nvidia’s financial results, things could not be going better, with Q2 sales surging from
$39.3 billion to $46.7 billion – powered by a 56% bump in data-centre revenues. Some commentators have even predicted that Nvidia become the first company to could achieve
$1 trillion in annual sales, by 2030.
Is AI a bubble?
If Thiel is ahead of the curve, this would mean the AI bubble is about to pop. Naturally, he isn’t alone in thinking a correction is coming. Speaking at a dinner in San Francisco in August 2025, the CEO of OpenAI, Sam Altman,
opined: “Someone is going to lose a phenomenal amount of money… When bubbles happen, smart people get overexcited about a kernel of truth.”
The concern around AI is multifaceted. First is the gap between the productivity improvements promised by AI firms and the (trifling) benefits witnessed on the ground.
The Economist, for example, has shown that despite being the breeding ground for some of the world’s most prolific technology firms, the US has seen almost
zero economic productivity growth from AI.
The other issue is the
web of dependency that Nvidia is – intentionally or unintentionally – establishing in the marketplace. It does this by investing in firms like
Mistral, Figure AI, and xAI – which, in turn, redeploy some of the venture capital to buy Nvidia’s chips. Through this feedback loop, as tens and hundreds of billions flow around the tech sector, the stock market is rewarding any company they touch with
a value hike.
It must be remembered that Nvidia’s chips are not the product: the AI services they
enable are. So, in a market where the cost of the hardware – not to mention the water and energy bills – massively outstrips the product’s returns, how does the model stay afloat?
If any of these mechanics sound similar to the infamous dotcom bubble – and its subsequent
crash – of the late 1990s, that’s because they are. Thiel has
said as much himself.
What will happen to AI?
If other tech moguls like Thiel smell a rat, they will jump ship. In such a scenario, no matter how impressive Nvidia’s financial results are, AI’s crash becomes a self-fulfilling prophecy. Investors have one more restless night ahead, before Nvidia’s Q3
results are released on Wednesday 18th November.
Whether the AI bubble bursts soon or later, the technology itself is unlikely to go away. While the dotcom bubble severely dented confidence, ecommerce today is thriving. This could be the trajectory AI follows – its stocks slumping but the technology inevitably
becoming a part of our everyday lives; peddled by the handful of businesses, like Microsoft, that avoided being overexposed to Nvidia.