SoftBank Group reported a net loss of 1.1 trillion yen in the quarter covering July through September, the company said on Tuesday. The loss is equivalent to roughly $7 billion using the conversion provided in the original report.
That outcome marks a sharp reversal from the same quarter a year earlier, when SoftBank logged a net profit of 2.5 trillion yen after booking a substantial investment gain tied to an increase in value of its stake in OpenAI, the company behind ChatGPT.
Analyst expectations had varied considerably heading into the results. A survey of three analysts by LSEG produced forecasts ranging from a profit of 233 billion yen to a loss of 113 billion yen, underscoring how difficult it is to predict SoftBank’s headline earnings given the sensitivity of its reported results to swings in asset valuations.
Central to investors’ focus is SoftBank’s large commitment to artificial intelligence. The company has spent $64.6 billion to acquire a roughly 13% stake in OpenAI, a position that has amplified the impact of valuation changes in the sector on SoftBank’s reported profits and losses.
Recent political and regulatory developments have added to investor unease. The Democratic Party’s strong showing in the recent US midterm elections has increased expectations of regulatory scrutiny of the technology sector, a factor that market participants have cited as intensifying worries about future returns in AI-related investments.
SoftBank’s share price has reflected those concerns. The company’s stock has declined sharply since the start of June, falling by almost half in that period according to the figures cited in the report.
The sector faced an additional reputational shock from media reports that the FBI is investigating Nvidia’s CEO, Jensen Huang, related to an alleged affair with a Chinese businesswoman who has been accused of being a spy for Beijing. SoftBank was previously a major investor in Nvidia but does not currently hold a stake in the chipmaker.
Currency note: The source material referenced an exchange rate of $1 = 157.9700 yen.