SoftBank shares plunge after Vision Fund posted a record $32 billion loss

Shares of Japanese technology investor SoftBank fell on Friday after the company reported a record loss in Vision Fund’s technology investment unit.

SoftBank shares closed down 3.68% in Tokyo.

The company said Thursday that its Vision Fund segment lost a record 4.3 trillion yen ($32 billion) in the fiscal year ending March 31.

It reported a loss on investments in its vision funds of 5.28 trillion yen.

The $100 billion Vision Fund was launched in 2017 under SoftBank founder Masayoshi Son and rocked the tech investment world.

It’s invested in some of the world’s largest tech companies, but some of those bets, like the one on WeWork, have foundered.

The Vision Fund, which also deals with Chinese technology companies, has also suffered from Beijing’s crackdown on the domestic technology sector and the subsequent drop in share prices. SoftBank said Thursday that it posted a loss on its investment in SenseTime, the Chinese artificial intelligence company.

And while there has been a rebound in the US tech-heavy Nasdaq stock exchange this year so far, during SoftBank’s fiscal year — which ended March 31 — the index is still down. Tech stocks have faced headwinds from rising interest rates around the world that have forced investors away from riskier assets like high-growth stocks.

To weather the storm, SoftBank is selling stakes in Alibaba, the Chinese e-commerce giant that made Son and SoftBank a fortune, as well as US company Uber.

SoftBank’s management pledged a year ago to go into “defense” mode and be more disciplined in its investment strategy. The pace of investment has slowed in recent months.

But the company is now eyeing what it sees as its next investment opportunity: artificial intelligence.

“AI has finally arrived,” Yoshimitsu Goto, Chief Financial Officer at SoftBank, said at a press conference Thursday.

Goto wondered if SoftBank should now go into “attack” mode.

“In situations like this, should we just maintain defense or should we maintain balance with offense?” Goto asked.

SoftBank is also preparing for the initial public offering of Arm, the British chip maker it acquired in 2016. Arm has secretly applied in the US for a listing. Goto said the IPO process was “running smoothly”.