Japan's SoftBank Group reported a net loss of approximately ¥1.12 trillion ($7.1 billion) for the September 2026 quarter, as heavy investments in the artificial intelligence sector, spending on data centre projects and declines in technology stocks weighed on its financial performance.
The company announced the results on Tuesday, November 10, reporting a loss for the July-September period. This marks SoftBank's return to quarterly losses after nearly two years. The development is also significant for India's startup ecosystem, given the Japanese investment giant's long-standing exposure to Indian technology companies.
SoftBank's quarterly results were significantly below market expectations. According to the average estimates of eight analysts compiled by Bloomberg, the company was expected to report a profit of approximately ¥129 billion. Instead, it recorded a net loss exceeding ¥1 trillion.
In the corresponding quarter last year, SoftBank reported a profit of approximately ¥2.5 trillion. At the time, an increase in the valuation of its stake in OpenAI had contributed significantly to its earnings.
The financial environment has since changed, with declines in technology stocks and growing investor concerns about the future earnings potential of artificial intelligence businesses. A substantial portion of SoftBank's financial performance depends on the valuations of the companies in which it invests, making its quarterly results sensitive to fluctuations in equity markets.
The decline in technology stocks was not the only factor behind SoftBank's quarterly loss. Expenditure on artificial intelligence data centre projects in the United States also contributed to the company's financial pressure.
SoftBank had made advance payments to purchase equipment related to power generation. Subsequently, changes in project requirements and procurement plans resulted in a loss of approximately $3.7 billion for the company.
Interest payments on borrowings and other financing expenses also increased. SoftBank's financing costs more than doubled during the July-September quarter, reaching approximately ¥462 billion.
Founder Masayoshi Son has been committing substantial capital to artificial intelligence businesses. The company has also been using debt and other capital-raising methods to finance these investments. Consequently, investors are monitoring not only the potential returns from these businesses but also the increase in SoftBank's debt burden.
SoftBank's Vision Fund, which invests in hundreds of technology startups and companies worldwide, also reported a loss during the September quarter.
The fund's business segment recorded a loss of approximately ¥81.6 billion. The performance of investments linked to chip designer Arm Holdings, Intel and South Korean e-commerce company Coupang also weighed on SoftBank's financial position.
However, not all its investments generated losses. Some companies recorded increases in valuation, contributing gains to the portfolio. These gains, however, were insufficient to offset the impact of other expenses and losses.
SoftBank has invested in several prominent Indian companies during the rapid expansion of the country's startup ecosystem. Its investments have included Ola, Ola Electric, Swiggy, Meesho, Lenskart, FirstCry, OYO and Delhivery.
As of December 2025, SoftBank's Vision Fund had made 24 investments in the Indian market. Several of these startups have since entered the stock market.
However, SoftBank may no longer hold stakes in all the companies in which it previously invested. The company has completely exited its investments in Paytm, Policybazaar and Flipkart. Therefore, historical investment records do not necessarily indicate that SoftBank continues to hold investments in all these businesses.
Similarly, SoftBank's quarterly loss does not mean that every Indian company in its investment portfolio is operating at a loss.
SoftBank has allocated substantial capital to artificial intelligence-related companies in recent years, with OpenAI representing its largest investment.
The Japanese investment group is reported to have invested approximately $64.6 billion in OpenAI and holds an estimated 13% stake in the company. The returns generated by this investment will be an important factor for SoftBank as it seeks to assess the financial outcomes of its substantial AI commitments.
Fluctuations in OpenAI's market valuation could also affect the value of SoftBank's investment.
The company's challenges extend beyond its exposure to OpenAI. SoftBank's own shares have also declined significantly. Compared with the peak recorded in June, the share price is reported to have fallen by more than 50%.
The company continues to face debt-related pressure, while concerns have also been raised about the possibility of tighter regulations for AI companies in the United States.
Against this backdrop, investors are assessing how SoftBank will manage its substantial investments while meeting its debt obligations.
