SoftBank books surprise loss of US$2.4 billion in third quarter

TOKYO: Japanese technology investor SoftBank Group booked a surprising net loss of ¥369.2 billion (US$2.4 billion) in the October-December quarter as valuations at its Vision Fund investment arm fell.

In particular, SoftBank was hit by unrealised valuation losses for South Korean e-commerce platform Coupang, Chinese ride-hailing firm Didi Global and AutoStore Holdings.

The result will further raise questions about how SoftBank will fund one of its most ambitious undertakings - a hefty investment in OpenAI.

Cash and cash equivalents dropped to ¥4.7 trillion (US$30.6 billion) as of end-December from ¥6.2 trillion in March which was the end of the previous financial year.

Sources said in January that SoftBank was in talks to invest up to US$25 billion in the ChatGPT creator. Recent media reports have said that figure has grown to US$40 billion though some of that amount would later be syndicated out to other investors.

SoftBank has also committed to investing US$15 billion in Stargate - a venture with OpenAI and Oracle that will build AI data centre capacity in the United States and which has been backed by US President Donald Trump.

The announcements mark a return to the aggressive SoftBank of old which rocked the technology investment world by taking big bets on startups through its Vision Funds.

The third-quarter result compares to an LSEG consensus estimate of a net profit of ¥234 billion drawn from four analysts and a profit of ¥950 billion in the same period a year earlier.

The Vision Fund unit posted an investment loss of ¥352.7 billion, breaking a run of two consecutive quarters in the black.

Vision Fund 1 has had a gross gain of US$21.6 billion since its inception in 2017 while Vision Fund 2, which covers a broad suite of earlier-stage startups, has logged a US$22.2 billion loss since 2019.