SoftBank reports a $6.3 billion loss in its Vision Fund business

SoftBank reports a $6.3 billion loss in its Vision Fund business

SoftBank is planning to gear up for increased AI investments. The company has faced an unpredicted consecutive quarterly overall loss and continued deficits in its investment business. Vision Funds has recorded a gain of approximately $0.8 billion in the current quarter. This gain also includes shared assets like ARM holdings.

However, excluding the shared assets, SoftBank’s Vision Fund 1 and 2, together with its Latin American fund, has recorded a loss of 13 Billion yen ($91 million). This loss is lower than the loss the company had faced a year earlier, which is 2,919 billion yen. As of June 30, the investments across three funds collectively lost $6.3 billion.

SoftBank has reported a Net loss of 477.6 billion yen ($3.3 billion) which is against the investment analysts’ predictions. They expected a return to profitability this quarter. The company disclosed that SoftBank’s Vision Funds 1 and 2 have experienced a quarterly loss of 38.749 billion yen and 46.860 billion yen, respectively. However, the LatAm fund has recorded a gain of 47.496 billion yen. Many additional investments have contributed approximately 25.070 billion yen in gains.  The sale of portfolio company Pismo to Visa for $1 billion in June has boosted the Latin American sector’s performance.

The decline in share prices of holdings like Alibaba, Deutsche Telekom, and T-Mobile US has caused additional pressure on SoftBank. This pressure resulted in an overall investment loss of 699 billion yen for the quarter. SoftBank has made significant progress with its initial vision fund. With a $90 billion fund, the company has made 94 investments. It has invested $37.5 billion in private companies, $20.5 billion in public companies, and $44.2 billion in exits. From its $108 billion, Vision Fund 2 stands at $32.2 billion.

Recently, SoftBank launched its Japanese subsidiary responsible for its domestic operations. It has launched a new endeavor called SB Intuitions which will help to develop a large language model and generative AI services specially focused on Japanese consumers. Additionally, SoftBank has initiated a joint venture to create services for third parties.

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