The Japanese multinational holding company Softbank has posted a first-quarter loss of $21.68 billion from its Vision Fund investment unit.
It's the second biggest loss the company has reported as the economic climate begins to hit the tech industry, according to CNBC.
Vision Fund was set up in 2017 and invests in tech companies, such as Slack, Uber and Nvidia. The 2.93 trillion Japanese yen it consumed contributed to a 3.16 trillion yen net loss. The deficit has been put down to a slump in 'high-growth' stocks due to increasing inflation that has resulted in the US Federal Reserve and other central banks raising interest rates.
The company has said that it also saw a decline in the share prices of a wide range of its portfolio companies, which are feeling the effects of the global financial downturn. There is a growing concern over a potential economic recession driven by inflation, as well as rising interest rates.
Softbank is one of the biggest investors in the Swedish pay-later company Klarna, which has already announced cuts to its workforce due to the economic situation. Likewise, Uber is cutting back on spending intending to become a leaner business.
"After earnings, I spent several days meeting investors in New York and Boston," Khosrowshahi told staff in a meeting back in May, according to CNBC. "It's clear that the market is experiencing a seismic shift and we need to react accordingly."
It appears that the rapid growth of the tech industry, which skyrocketed during the pandemic, has peaked and is now on a downward trend. Some economists may put this down to market correction, though there is a suggestion that the latest tech 'bubble' has burst, similar to the dot.com boom and bust.
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Bobby Hellard is ITPro's Reviews Editor and has worked on CloudPro and ChannelPro since 2018. In his time at ITPro, Bobby has covered stories for all the major technology companies, such as Apple, Microsoft, Amazon and Facebook, and regularly attends industry-leading events such as AWS Re:Invent and Google Cloud Next.
Bobby mainly covers hardware reviews, but you will also recognise him as the face of many of our video reviews of laptops and smartphones.