After narrowing its losses and seeing gains in its Vision Fund portfolio, Japan’s SoftBank Group says it’s bullish on new AI deals despite market anxiety.
The group’s net loss narrowed to 174.3 billion Japanese yen (about $1.2 billion) in the three-month period ended June 30, down from a 477.6 billion yen loss the same time a year ago. SoftBank Group’s net asset value reached a new record high of 35.3 trillion yen.
Meanwhile, its Vision Fund arm saw a 1.9 billion yen investment gain, a stark contrast to the previous quarter in which it saw a 57.5 billion yen loss. SoftBank pointed to the increased value of portfolio companies including ByteDance and Coupang as the reason for the upturn in gains.
On Monday, SoftBank had its largest single-day fall since 1998, losing $15 billion of its value during a widespread stock sell-offs in Japan after its central bank decided to raise its benchmark interest rate to around 0.25%—its highest rate since 2008. Chipmaker Arm, which accounts for over half of the value of SoftBank’s assets, also suffered a significant fall in its share price.
SoftBank plans to buy back up to 500 billion yen of shares in response to calls from shareholders, which include activist investor Elliott Investment Management, to bolster its share price.
The firm had been exiting or writing down parts of its Vision Fund’s publicly listed portfolio in recent months, but CFO Yoshimitsu Goto says it is actively pursuing new AI-related investments as the Vision Funds come out of hibernation.
In the three-month period ended June 30, SoftBank completed three investments via its Visions Funds, including rounds for Israeli cybersecurity startup Wiz and New York-based market intelligence specialist AlphaSense.
So far this year, $65.6 billion has been invested in the AI and machine learning sector, according to PitchBook data, more than three-quarters of last year’s total deal value.
Last quarter, SoftBank committed $5 billion for strategic investments this year, primarily targeting logistics, robotics and autonomous driving.
In June, SoftBank launched a new joint venture with healthcare company Tempus AI to build an AI-enabled diagnostic platform. In April, the group invested around $200 million in Tempus’ Series G. Last month, SoftBank also acquired UK chipmaker Graphcore as part of its AI push.
Featured image by Tomohiro Ohsumi/Getty Images
