November 10, 2026, (Inside AI) — SoftBank Group reported a net loss of 768 billion yen ($4.85 billion) for its fiscal first half on Tuesday, a sharp reversal from the profit it posted a year earlier. The Tokyo-based technology investor attributed the loss to growing uncertainty surrounding its artificial intelligence strategy, which has encountered political setbacks in the United States and regulatory hurdles in China.
The loss underscores the mounting pressure on SoftBank's aggressive AI bets, which include majority stakes in chip designer Arm Holdings and stakes in AI startups such as OpenAI. The company's shares have fallen about 15% since the start of the year, reflecting investor concerns over its exposure to volatile AI markets.
Arm's Valuation Slips As AI Hype Cools
SoftBank's largest AI asset, Arm, has seen its valuation decline amid a broader correction in semiconductor stocks. Arm's shares have dropped roughly 20% from their peak in July, as investors reassess the near-term revenue potential of AI chips. The company generates a significant portion of its revenue from licensing its chip designs to data center operators and device makers.
In a statement, SoftBank's Chief Financial Officer Yoshimitsu Goto said: "The loss reflects the volatility inherent in our investment strategy, but we remain confident in the long-term value of our AI portfolio." He added that SoftBank is actively working to mitigate risks through diversification and operational improvements at its portfolio companies.
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Analysts note that SoftBank's loss also stems from markdowns on its Vision Fund investments, which have been hit by the slowdown in Chinese tech stocks and regulatory scrutiny. The Vision Fund segment reported a loss of 1.2 trillion yen for the half-year, compared to a profit of 300 billion yen a year earlier.
The political setbacks in the U.S. include delays in government approvals for AI-related projects and heightened scrutiny of foreign investments in critical technology sectors. In China, new regulations on data security and cross-border data flows have created obstacles for SoftBank-backed companies operating in the region.
SoftBank's founder, Masayoshi Son, has been a vocal advocate for AI, predicting that artificial general intelligence will transform industries within a decade. However, the recent losses may force the company to recalibrate its investment pace. Sources close to the company indicate that SoftBank is considering slowing down new AI commitments until market conditions stabilize.
The broader AI investment landscape has cooled after a surge in 2024 and 2025. Venture capital funding for AI startups fell 25% in the third quarter of 2026 compared to the same period last year, according to data from PitchBook. This downturn affects SoftBank's ability to exit investments at high valuations and could delay its plans to list some portfolio companies.
Despite the challenges, SoftBank maintains a strong cash position of 3.5 trillion yen, which Goto said provides flexibility to navigate the current environment. The company also announced a share buyback of up to 100 billion yen to support its stock price.
Looking ahead, SoftBank's performance will depend on its ability to monetize AI investments and adapt to regulatory changes. The company is exploring partnerships in Southeast Asia and India to diversify its geographic exposure. However, analysts caution that the road to profitability remains uncertain, given the cyclical nature of the tech industry and the evolving AI regulatory landscape.
Shamil has a low tolerance for AI that only works in controlled demos. He covers agentic systems and generative AI with the skepticism of someone who has seen too many “revolutionary” tools quietly disappear six months after launch.
