SoftBank swings to $2.4 billion loss in Q3 as value of Vision Fund’s holdings take a hit | Stock Market News

SoftBank Group Corp. swung to losses for the December quarter due to a drop in the value of the Vision Fund’s public holdings, boding ill for founder Masayoshi Son who has to raise $500 billion for the Stargate artificial-intelligence project. 

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 bottomline 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.

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 app 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. 

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.”