Peter Thiel Sells Nvidia Stake to Invest $45 Million in Microsoft and Apple, Signaling Who Will Win the AI Race

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Silicon Valley watches closely whenever Peter Thiel reallocates his capital. Late last year, he executed a major financial shift, and the adjustments made to his fund could offer significant insights into the evolving landscape of the AI competition.

Regulatory filings indicate that during the third quarter of 2025, Thiel Macro LLC, the billionaire’s hedge fund, liquidated its entire holding of 537,742 Nvidia shares, a stake worth well over $100 million. This transaction represented one of Thiel’s most substantial portfolio realignments of the year, as the Nvidia position had previously comprised approximately 40% of the fund’s total assets.

Executing major financial shifts

This decision was not made in isolation. Concurrent with the Nvidia divestment, the fund established new stakes in Apple and Microsoft. Collectively, these transactions reduced Thiel Macro’s exposure to U.S. equities by over 50%, dropping from $212 million to $74 million. While Nvidia is constructing the infrastructure for AI’s future, platforms that embed AI into consumer goods may offer a more sustainable investment. Firms like Nvidia have seen their valuations skyrocket during the initial phase of the AI surge due to massive infrastructure spending. However, a distinct business model could prove superior in the long run.

Nvidia has been the primary winner of the AI revolution. Its processors are essential for training virtually every major model today, a dominance reflected in its stock price as it briefly became the world’s most valuable company with a $5 trillion market cap in October. However, this exceptional performance has not shielded it from increasing concerns about an AI bubble, especially following revelations of circular transactions with other major AI players.

These transactions typically follow a pattern where Nvidia invests capital in an AI startup or cloud provider in exchange for a pledge to buy Nvidia chips. Essentially, this means Nvidia is funding its own chip production. The frequency of such agreements—involving entities like OpenAI and CoreWeave—has intensified skepticism regarding the potential ceiling for the chipmaker’s stock value.

While Thiel’s decision may simply be a case of cashing out on Nvidia for a massive gain, the co-founder of PayPal and Palantir has historically maintained a more balanced perspective on AI compared to many of his contemporaries in Silicon Valley.

“It’s more than a nothing burger and it’s less than the total transformation of our society,” he stated during an interview with the New York Times last year. During that discussion, he drew parallels between the current rise of AI and the emergence of the Internet in the 1990s.

The composition of his portfolio after these adjustments is telling. Just as significant is where Thiel allocated capital after exiting Nvidia. His combined investments in Apple and Microsoft totaled approximately $45 million, now constituting the bulk of his holdings. Numerous online observers interpret this shift as a cautious wager that the AI sector is indeed a bubble. Thiel himself has labeled AI as “extremely bubbly,” cautioning that the technology could follow the path of the dotcom bust, though he also acknowledges its ultimate value and transformative potential.

Apple and Microsoft are hardly underdogs in the AI space; rather, they are best positioned to convert AI from a capital expense into a consumer-facing product. Microsoft’s extensive incorporation of AI into Office, Azure, and Copilot has established it as the primary corporate beneficiary of its partnership with OpenAI. Conversely, Apple boasts over two billion active devices and a services division that recently achieved record quarterly revenue—a distribution advantage that no chip manufacturer can match.

Furthermore, these corporations possess greater diversification than Nvidia. While the chipmaker has bet heavily on AI, deriving most of its revenue from a handful of large tech clients, Microsoft and Apple operate complex businesses where AI is just one component. Although both would feel the effects if the AI trend falters, their foundational operations provide more growth avenues than a chipmaker whose fortunes are inextricably linked to AI computing demand.