SoftBank Reports $6.3B Cumulative Loss in Vision Fund, Highlights Challenges Ahead

As SoftBank intensifies its focus on AI investments, the company has reported an unexpected consecutive quarterly loss, alongside ongoing challenges in its existing investment business. However, the Vision Funds showed a positive quarter, registering a gain of $0.8 billion, benefiting from shared assets such as ARM holdings. When excluding these shared assets, SoftBank’s Vision Fund 1 and 2, along with its Latin American fund, experienced a quarterly investment loss of 13 billion yen ($91 million), a marked improvement from the staggering 2,919 billion yen loss ($20 billion) reported a year earlier.

Overall, as of June 30, SoftBank's investments across these three funds totaled a cumulative loss of $6.3 billion. The company faced a net loss of 477.6 billion yen ($3.3 billion), surprising analysts who had anticipated a return to profitability for this quarter. CFO Yoshimitsu Goto emphasized during today's presentation that SoftBank is cautiously returning to investment activities while maintaining a keen focus on the AI landscape.

The total commitments for Vision Funds 1 and 2 and the Latin American fund stand at $166.2 billion. SoftBank projects its acquisition costs at $146.6 billion, against a fair value of current assets at $140.3 billion. Specifically, Vision Fund 1 and 2 reported quarterly losses of 38.749 billion yen and 46.860 billion yen, respectively, whereas the Latin American fund achieved a gain of 47.496 billion yen, bolstered by the sale of Pismo, one of SoftBank’s portfolio companies, to Visa for $1 billion in June.

The overall downturn was compounded by falling share prices in major holdings, including Alibaba, Deutsche Telekom, and T-Mobile US, leading to a total investment loss of 699 billion yen (approximately $4.9 billion) for the quarter.

SoftBank has made notable progress through its earlier Vision Fund. The company reported that of the 94 investments made from its nearly $90 billion fund, the "fair value" breaks down into approximately $37.5 billion in private companies, $20.5 billion in public companies, and $44.2 billion in exits. Conversely, the fair value from its $108 billion Vision Fund 2 is only $32.2 billion, as it is still in the early stages of development.

Notably, 94% of portfolio companies across all funds have achieved a cash runway of over 12 months.

We’re currently tuned in to SoftBank's presentation to gather insights on Arm and its AI strategy, and we will provide updates as more information is disclosed. Recently, SoftBank's Japanese subsidiary launched SB Intuitions, aimed at developing a Large Language Model and generative AI services tailored for Japanese businesses and consumers. In addition, the company made a significant investment in Symbotic, a provider of AI-driven warehouse logistics and robotics solutions, alongside a joint venture for third-party services.

AI, Investment