By Kosaku Narioka

SoftBank Group reported a quarterly loss, partly due to the weakness in its technology funds business, as it geared up to make more investments in artificial intelligence.

The Japanese technology investment company said Wednesday that it booked a net loss for the three months ended December, swinging from a net profit a year earlier and missing analysts' estimates.

Its Vision Funds business posted a loss as the value of e-commerce company Coupang, Indian electric-scooter maker Ola and some other startups declined.

In January, SoftBank Group and OpenAI announced a plan to invest up to half a trillion dollars in AI infrastructure in the U.S., together with other partners such as Oracle and Abu Dhabi-based MGX.

SoftBank Group said Wednesday that the venture, called Stargate, will be funded primarily through project finance and that equity investment will be limited.

Chief Financial Officer Yoshimitsu Goto said the company will be able to maintain its fiscal discipline while making investments for Stargate.

The company's cash position stood at 5.0 trillion yen, equivalent to $32.79 billion, as of the end of 2024.

SoftBank Group said it revised margin-loan terms using Arm shares in December, raising the borrowing limit to $13.5 billion from $8.5 billion. The increased borrowing capacity of $5.0 billion was untouched as of December.

SoftBank's earnings are susceptible to fluctuations in technology stocks. The recent emergence of Chinese AI startup DeepSeek raised concerns about demand for advanced chips and data centers, triggering a selloff in AI-related stocks late last month. Shares in SoftBank were also caught in the market rout, slumping more than 13% over two days.

SoftBank Group and ChatGPT maker OpenAI said last week that they plan to team up to offer AI services, initially targeting Japanese businesses to lay the groundwork for potential expansion worldwide.

For its third quarter, SoftBank Group booked a net loss of 369.165 billion yen, equivalent to $2.42 billion, compared with a net profit of Y950.00 billion in the year-earlier period. That missed the estimated net profit of Y322.2 billion in a poll of analysts by data provider Visible Alpha.

Its Vision Funds business posted a loss of Y309.93 billion, compared with a profit of Y422.74 billion.

Even so, continued hopes for growing AI-related demand at the company's investees, including subsidiary Arm Holdings, have boosted SoftBank Group's stock in recent months, with its shares rising 3.8% on Wednesday ahead of the results.

A few months ago, SoftBank Group Chief Executive Masayoshi Son predicted that artificial general intelligence, or AGI, in which computers have human-level cognitive abilities, would be achieved within two to three years. "I now realize that AGI would come much earlier," he said in February.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

February 12, 2025 04:51 ET (09:51 GMT)

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