SoftBank swings to $7 billion net loss in second quarter

By Anton Bridge

TOKYO, Nov 10 (Reuters) - Technology investor SoftBank Group generated a net loss of 1.1 trillion yen ($7 billion) in the July-September quarter, it said on Tuesday.

The result compares with 2.5 trillion yen profit in the same period a year earlier when it logged a huge investment gain on an increase in the value of its stake in ChatGPT-maker OpenAI.

SoftBank’s earnings are volatile and difficult to predict. Forecasts from three analysts polled by LSEG had ranged from a profit of 233 billion yen to a loss of 113 billion yen.

The Japanese firm’s big bets on artificial intelligence — particularly the $64.6 billion it has spent on its 13% stake in OpenAI — have raised questions about how well it will be able to weather setbacks currently buffeting the sector.

The Democratic Party’s sweeping success in US midterm elections last week heightened expectations of regulatory scrutiny, amplifying concerns that had been growing among investors about returns for the AI industry.

SoftBank’s shares, like other AI stocks, have been hit hard, almost halving in value since the start of June.

The sector was further rocked by the news that the FBI is looking at Jensen Huang, Nvidia’s CEO and the face of the AI boom, after his affair with a Chinese businesswoman alleged to be a spy for Beijing. SoftBank was a major investor in the AI chipmaker in the past but no longer holds a stake.

($1 = 157.9700 yen)