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SoftBank Treads Cautiously as it Resumes AI Investments Amid Market Uncertainties

Japan
s 9984.TSE Blue Chip 150
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SoftBank Group announced a net loss of 1.4 trillion yen for H1 2022, citing currency impact and some devalued investments. The conglomerate faces a mixed financial picture, with a weaker yen impacting its dollar-denominated debt and some investments facing devaluation.

SoftBank is directing investments towards AI-related firms, with an increased focus on synergies with existing assets. CEO Masayoshi Son takes overall responsibility for investment decisions, including WeWork, but highlights the organization’s collective responsibility. WeWork’s fiscal impact on SoftBank is substantial, accounting for nearly $4 billion in losses for fiscal year 2022.

The company notes a more reserved approach, seeking opportunities in companies showing substantial potential for collaboration. Despite caution, SoftBank increases AI-related investments, allocating around $1.5 billion in Q3, up from $500 million in the same period last year.

Reflecting market uncertainty, CFO Yoshimitsu Goto emphasizes a vigilant investment strategy, evaluating opportunities judiciously.

The conglomerate faces increased costs due to the improved valuation of invested companies, impacting the performance of its Vision Fund umbrella..

Analysts highlight SoftBank’s stricter criteria for AI investments, focusing on mid-to-late-stage companies with high growth potential.

 

 

 

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