SoftBank Vision Funds swing to annual loss as investment gains slow by 40%

Softbank's Vision Fund business on Tuesday posted a loss in the fiscal year ended March as it booked slowing gains at its massive tech investment arm.

SoftBank said it notched a gain on investment at its Vision Funds of 434.9 billion yen in the fiscal year, a 40% fall from the 724.3 billion yen booked in the previous year.

In its fiscal fourth quarter — the three months ended March — SoftBank's Vision Funds segment recorded a 26.1 billion yen gain, helped by a rise in the value of TikTok owner ByteDance.

The Vision Fund segment overall logged a pretax loss of 115.02 billion yen ($777.7 mllion) versus a profit of 128.2 billion yen in the previous fiscal year.

For the latest fiscal year, SoftBank saw gains on its investments in Chinese ridehailing company Didi as well as South Korean e-commerce firm Coupang. However, the performance of its investment arm was hurt by a drop in value of companies including AutoStore.

The Vision Funds are a key focus for investors who are looking for signs of improvement at SoftBank's huge investment arm, after it swung to a surprise loss in the company's fiscal third quarter.

SoftBank's investment division can be inconsistent, as it is driven by changes in public and private financial markets.

SoftBank's stock is down about 17% this year as volatility in financial markets and concerns about the macroeconomic environment continues to weigh on the company.

SoftBank founder Masayoshi Son has sought to position company as a key player in artificial intelligence through various investments and acquisitions. The firm owns the majority of semiconductor designer Arm and announced plans this year to acquire server chip designer Ampere Computing for $6.5 billion. Ampere's semiconductors are designed to run AI applications.

One of SoftBank's biggest AI bets has been on OpenAI, the creator of ChatGPT. SoftBank invested $30 billion in OpenAI as part of a broader $40 billion financing round in March that valued the startup at $300 billion.

Softbank is also involved in Stargate, a joint venture that was unveiled by U.S. President Donald Trump in January, calling for hundreds of billions of dollars of investment into AI infrastructure.

There are still questions about how SoftBank plans to finance these ventures and whether it will need to sell down some of its holdings in companies like Arm.

Citing people familiar with the matter, Bloomberg had on Monday reported that dozens of financial players are reassessing investment in data centers due to growing economic volatility, and SoftBank has yet to come up with a financing template for Stargate.

Yoshimitsu Goto, chief finance officer at SoftBank, said during a Tuesday press conference that media reports of banks hesitating to fund SoftBank's efforts are not true.

"We are very much making progress," Goto said.

He added there are around 100 proposals being made for sites to build data centers as part of Stargate, with the first facilities likely to be in Texas.

SoftBank posted its first annual profit in four years at 1.15 trillion yen.

While the Vision Fund was an overall drag on profit, it was a big gain in SoftBank's older investments in Alibaba, T-Mobile and Deutsche Telekom, that helped drive its overall profit.

Arm and SoftBank's telecommunications business also contributed positively to the group's overall profitability.