SoftBank Reports Unexpected $2.4 Billion Dollar Quarterly Loss as AI Investment Plans Grow

Japanese technology giant SoftBank has posted a surprising quarterly loss of ¥369.2 billion ($2.4 billion) for the period ending December, marking a significant downturn from its ¥950 billion profit in the previous year. The results fell drastically short of market expectations, with analysts having forecast a ¥234 billion profit.

The company’s chief financial officer, Yoshimitsu Goto, attributed the disappointing performance to investment losses in the Vision Funds and unfavourable currency movements as the dollar strengthened against the yen. The Vision Funds recorded losses totalling ¥352 billion ($2.3 billion), with major declines in high-profile investments including South Korean e-commerce platform Coupang and Chinese ride-hailing service Didi.

The losses come at a crucial time as SoftBank prepares to make substantial investments in artificial intelligence. The organisation is set to back Stargate, an American AI infrastructure project, through a joint venture with OpenAI, Oracle, and MGX. The ambitious project has secured pledges of up to $500 billion in funding over four years, with $100 billion immediately accessible.

SoftBank’s commitment to AI development extends beyond Stargate, with plans to invest between $15 billion and $25 billion in OpenAI as part of a broader funding round expected to raise approximately $40 billion. The company has already invested $2 billion in OpenAI earlier this year, demonstrating its strategic focus on AI technology.

Despite these challenges, SoftBank has maintained its share buyback programme, completing nearly ¥210 billion of a planned ¥500 billion repurchase. The company’s share price has shown resilience, closing 3.8% higher at ¥9,856 in Tokyo trading, though it remains below the record highs achieved in July.

The mixed results highlight the volatile nature of SoftBank’s investment strategy, with previous ventures like WeWork resulting in significant losses. As the company pivots towards AI investments, stakeholders will be watching closely to see if these new technological bets yield better returns than previous initiatives.