SoftBank Reports Q3 Loss Amid Vision Fund's Struggles
SoftBank Group, a prominent Japanese technology investor, has reported a net loss of 369.2 billion yen ($2.4 billion) for the October-December quarter. The loss primarily stems from declining valuations within the company's Vision Fund investment arm.
According to sources, SoftBank had been in discussions to invest up to $25 billion in OpenAI, the creator of ChatGPT. However, recent media reports suggest that this figure has increased to $40 billion, with a portion syndicated to other investors. SoftBank has also pledged $15 billion to Stargate, a joint venture with OpenAI and Oracle aimed at developing AI data center capacity in the United States.
The third-quarter results fell short of LSEG's consensus estimate of a 234 billion yen net profit and a profit of 950 billion yen in the same period last year. The Vision Fund unit recorded an investment loss of 352.7 billion yen, ending its streak of two consecutive profitable quarters.
Vision Fund 1 has accumulated a gross gain of $21.6 billion since its launch in 2017, while Vision Fund 2 has faced a $22.2 billion loss since its inception in 2019. The company's loss will likely raise concerns about its ambitious investment in OpenAI and its future plans for investing in early-stage startups.