2/12/2025
SoftBank Suffers Surprise Loss in Final Quarter
The Times (London) (02/12/25) Powell, Emma
The Japanese conglomerate that is preparing to finance one of the world’s largest bets on artificial intelligence suffered a surprise loss during its latest quarter. SoftBank (SFTBY) reported a loss of 369.2 billion yen ($2.4 billion) in the three months to the end of December, down from a profit of 950 billion yen a year earlier. The consensus forecast for the latest quarter had been for a net profit of 234 billion yen, according to London Stock Exchange Group estimates. The result was largely attributable to investment losses at the Vision Funds, its technology-heavy investment vehicles, and foreign exchange impacts as the dollar strengthened against the yen, according to Yoshimitsu Goto, SoftBank’s finance chief. The Vision Funds accumulated 352 billion yen ($2.3 billion) in losses, led by declines for some of its highest-profile investments, including Coupang (CPNG), dubbed “South Korea’s Amazon,” and Didi, a Chinese rival to Uber. SoftBank and Masayoshi Son, its founder, are gearing up to back Stargate, an American AI infrastructure project that is a joint venture with OpenAI, Oracle (ORCL), and MGX, the technology investment arm of the United Arab Emirates government. Up to $500 billion in funding has been pledged over four years, with $100 billion immediately available, its backers have said. Goto said “external funding” would be used alongside Stargate’s equity on a “project-by-project basis.” SoftBank pledged to invest $100 billion in the U.S. after Trump’s election victory in November, although it is not clear if Stargate is part of those plans. The Tokyo-based company is also set to contribute between $15 billion and $25 billion to OpenAI, leading a wider funding round that is expected to raise about $40 billion as the company behind ChatGPT seeks to develop and commercialise its large language model. SoftBank had already invested $2 billion in the company in January and Goti said these were “strategic milestones in our broader AI road map.” The company has completed almost 210 billion yen in share buybacks as part of a program to repurchase 500 billion yen in stock. SoftBank has become one of the biggest names in the tech industry, with investments in companies ranging from the Cambridge-based Arm (ARM) and ByteDance, the Chinese owner of TikTok, to Flipkart, the Indian ecommerce giant. SoftBank’s previous investment track record has been patchy, with some bets — including its backing for WeWork, which filed for bankruptcy last November — proving duds. However, the share price has benefited as investors have piled back into tech businesses in recent years, with SoftBank stock reaching a record high as recently as July. The stock had endured a tumultuous 12 months after being hit badly by the tech rout that gripped markets last summer, over fears around the health of the American economy. This delivered a double blow to the Japanese conglomerate by not only hitting SoftBank shares but also the value of the listed tech companies it has backed. It also emerged in June that the hedge fund Elliott Management had built a stake in SoftBank, pushing it to increase share buybacks. The shares closed 360 yen, or 3.8%, higher in Tokyo on Wednesday at 9,856 yen.
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