AI Proves Too Costly: SoftBank Reports $7 Billion Quarterly Loss
SoftBank posted a net quarterly loss amid spending on AI data center equipment and a decline in Intel shares.
SoftBank's net quarterly loss amounted to 1.12 trillion yen. A year earlier, the company reported a net profit of 2.5 trillion yen. Revenue reached 2.22 trillion yen, compared to analysts' forecast of 2.02 trillion yen. For the six months ending September 30, revenue grew by 13.3% due to the telecommunications business and the AI computing segment.
For the same six-month period, SoftBank incurred a loss of 597.2 billion yen. The company attributed this to changes in plans for purchasing power equipment for AI data centers in the U.S. Due to the risk of shortages and lengthy delivery times, it made advance investments to secure energy supplies for future facilities. By the end of September, total payments for such equipment reached $9.48 billion.
The Vision Fund segment ended the quarter with a loss of 81.58 billion yen, whereas a year earlier it reported a profit of 2.38 trillion yen. The result was impacted by a decline in the valuations of public companies, including Coupang and Grab.
As of the end of September, SoftBank's total investments in OpenAI amounted to $54.6 billion, with a fair value of $99.6 billion. This represents an investment gain of $45 billion. Potential growth in OpenAI's valuation following a new funding round has not yet been accounted for, as no official announcement has been made. SoftBank may reflect this result in the current quarter's financials.
The company also announced the signing of a 20-year lease agreement with OpenAI, which includes the provision of 8 GW of capacity for a data center project in Ohio. For the future data center in Texas, SoftBank plans to reduce water usage through a closed-loop cooling system with air heat dissipation, hire local specialists, and utilize local resources.
