SoftBank posts $7 billion quarterly loss on US data center and Intel hits

SoftBank fell to a net loss of 1.12 trillion yen, or about $7 billion, in its fiscal second quarter, according to CNBC Technology. The Japanese investment group blamed charges connected to power equipment for AI data centers in the United States and a drop in the value of its Intel shares.

For the six months through Sept. 30, SoftBank booked a 597.2 billion yen loss, roughly $3.7 billion, after procurement plans for power generation hardware at US AI data center projects changed. The company had spent ahead of time to lock in that equipment, citing worries about supply shortages and long lead times.

An executive told analysts on the earnings call that SoftBank had made bridge investments early to secure the gear in expectation of scarcity. Electricity is becoming a tighter constraint on AI data center construction as grids struggle to handle requests from very large users. By the end of September, advance payments tied to power generation equipment for US projects, including a site in Pike County, Ohio, had reached $9.48 billion.

Revenue climbed 13.3% over the six months, helped by telecommunications and AI computing. SoftBank said its namesake segment posted higher sales in every business, and AI computing revenue also grew.

The Vision Fund unit swung to an 81.58 billion yen loss in the quarter, after turning a 2.38 trillion yen profit a year earlier. Vision Fund 1 took a $20 million investment loss even though ByteDance added $1.3 billion in gains, as listed holdings such as Coupang and Grab fell. Investment gains across the Vision Funds came to 85.45 billion yen, far below the 2.81 trillion yen booked a year before.

SoftBank's stake in OpenAI carried a cumulative investment of $54.6 billion at the end of September, valued at $99.6 billion, for a gain of $45 billion. The company said a possible higher OpenAI valuation from a new funding round is not yet in its figures and could land in the fiscal third quarter.

SoftBank shares closed up 13.9% on Tuesday as Asian technology stocks rallied. The company also pointed to a 20-year OpenAI lease for eight gigawatts of IT capacity at an Ohio data center and said a Texas site will use closed-loop, air-cooled systems to limit water use.