SoftBank Posts 1.12 Trillion Yen Quarterly Loss Tied to AI Data Center Plans

What happened this quarter

A year earlier, the company made 2.5 trillion yen in profit; this time, it reported a net loss of 1.12 trillion yen for the fiscal second quarter. Revenue landed at 2.22 trillion yen, topping LSEG's 2.02 trillion yen estimate.

Across the six months to Sept. 30, revenue rose 13.3% on growth in telecommunications and AI computing. The company said its SoftBank segment saw higher sales across all businesses, and its AI computing segment also grew.

In the first half, the company booked a 597.2 billion yen hit related to revised procurement plans for power generation equipment serving U.S. AI data center projects. Shares closed up 13.9% on Tuesday, as Asian technology names such as Samsung Electronics and SK Hynix advanced alongside a Wall Street rebound.

Why AI infrastructure hit the numbers

Management linked the quarter's losses to equipment procurement for U.S. AI data centers and declines in Intel shares. SoftBank explained it made early purchases to lock in power generation equipment given worries about shortages and long lead times. "We made bridge investments in advance to secure power generation equipment in anticipation of shortage," a company executive said on the earnings call.

By September's end, total outlays for power-generation equipment supporting U.S. AI data center projects reached $9.48 billion, covering efforts such as the PORTS-Pike Technology Campus in Ohio. SoftBank also highlighted a 20-year agreement with OpenAI covering eight gigawatts of IT capacity tied to an Ohio data-center initiative.

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SoftBank noted power availability is increasingly a constraint as grids juggle demand from large users like data centers. On its planned Texas data center, the company said it is pursuing a closed loop, air cooled system to cut water use and plans to hire and source locally.

Vision Fund moves and OpenAI math

For the quarter, the Vision Fund segment posted a loss of 81.58 billion yen, a reversal from a 2.38 trillion yen profit in the prior year. The Vision Funds segment logged investment gains of 85.45 billion yen compared with 2.81 trillion yen in the prior year period.

Within the group, Vision Fund 2 generated gains of 89.26 billion yen, whereas Vision Fund 1 registered an investment loss of 3.86 billion yen. Despite a $1.3 billion uplift on ByteDance, Vision Fund 1 still booked a $20 million investment loss for the quarter, as declines in listed names such as Coupang and Grab weighed.

By September's close, SoftBank put its OpenAI position at $54.6 billion invested, with a stated value of $99.6 billion and gains totaling $45 billion. It said any bump from a forthcoming OpenAI financing isn't included yet and could appear in the fiscal third quarter, which could lift net asset value and help its loan-to-value ratio. "ChatGPT has been continuously a weapon of OpenAI, especially for consumers," said a SoftBank esecutive on the company's earnings call.

The bottom line for investors

SoftBank's AI buildout is showing up now as sizable upfront spending and losses, while the mark on key holdings like OpenAI could move later. Revenue is holding up, but the Vision Fund's swing and portfolio market moves remain a lever on results. Separately, SoftBank, along with Grab and Malaysia's PETROS, intends to put up $1.85 billion together as initial funding for AI infrastructure in Malaysia, with a longer-run objective of no less than five gigawatts of AI computing capacity. How these projects and valuations reset in the fiscal third quarter will matter for the company's assets and leverage figures.

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