(Bloomberg) — SoftBank Group Corp. tumbled to a loss in the December quarter, weighed down by a drop in the value of the Vision Fund’s public holdings, just as Masayoshi Son campaigns to raise $500 billion for the Stargate artificial-intelligence project.
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The Tokyo-based company reported a net loss of ¥369.2 billion ($2.4 billion) for the fiscal third quarter compared with a profit of ¥950 billion a year ago. The Vision Fund unit logged a ¥309.9 billion loss, hurting the bottom line after shares of public holdings such as Coupang Inc. and Didi Global Inc. gave up some of their gains from the previous quarter.
Volatility in the Vision Fund’s quarterly performance consistently dogs SoftBank, which has embarked on a project with OpenAI to invest $500 billion on the infrastructure needed to support and propel artificial intelligence development. The Japanese billionaire is exploring project financing to raise money. One scenario under review is to raise 10% of the total sum through equity with senior loans contributing as much as 70%, Bloomberg News reported.
Son’s previous big bet — the Vision Fund — still has hundreds of unlisted startups on its books. One is ByteDance Ltd., under pressure to sell its popular video app TikTok or face its shutdown. Another is Indonesian agritech company eFishery, which is facing possible liquidation and charges of accounting fraud less than two years after scoring a valuation of $1.2 billion.
The two Vision Funds together now hold investments in roughly 350 companies, according to a company statement released Wednesday. SoftBank plans to transfer its investment in UK self-driving startup Wayve Technologies Ltd. in the current quarter to Vision Fund 2, it said. The Vision Fund has been shifting many of its resources toward helping Son obtain controlling stakes in key AI technologies. SoftBank said it’s raised the total capital committed to the second Vision Fund by $5 billion to $65.8 billion.
Son unveiled the Stargate AI venture alongside OpenAI and US President Donald Trump last month. The project’s exact timeline, makeup and blueprint remain uncertain, though big names including Oracle Corp. and United Arab Emirates’ MGX have backed the endeavor.
“Stargate’s potential use of project finance, with only 10% equity-funded, may lessen SoftBank’s investment to below $5 billion of the joint-venture’s initial $100 billion spending, lessening the need to sell assets to raise funds,” Bloomberg Intelligence analyst Sharon Chen wrote in a note. “Stargate distributions may be limited in its initial years, given debt-service requirements.”
