SoftBank reported a fiscal second-quarter net loss of 1.12 trillion yen, equivalent to $7 billion, on Tuesday, as spending on U.S. AI data center equipment and share price declines eroded earnings. The company said it had made advance investments to secure power generation equipment for its AI data center projects in the United States due to concerns over potential shortages and long procurement lead times. A SoftBank executive stated during the company's earnings call: "We made bridge investments in advance to secure power generation equipment in anticipation of shortage." These early commitments led to a 597.2 billion yen ($3.7 billion) loss in the six months ending September 30 tied to changes in procurement plans for power generation equipment for AI data center projects.
Cumulative payments for power-generation equipment for U.S. AI data center projects, including the PORTS-Pike Technology Campus in Pike County, Ohio, totaled $9.48 billion as of the end of September. The company highlighted a 20-year lease agreement with OpenAI for eight gigawatts of IT capacity at a data center project in Ohio. Separately, SoftBank announced plans on Monday with Grab and Malaysia's PETROS to commit a combined $1.85 billion in initial capital to develop AI infrastructure in Malaysia, with a long-term target of at least five gigawatts of AI computing capacity.
SoftBank's Vision Fund segment swung to a loss of 81.58 billion yen in the fiscal second quarter, compared with a profit of 2.38 trillion yen a year earlier. Vision Fund 1 recorded an investment loss of $20 million in the quarter, despite a $1.3 billion gain on ByteDance, as shares of publicly traded portfolio companies including Coupang and Grab declined. Vision Fund 2 posted investment gains of 89.26 billion yen, while the overall Vision Funds segment recorded investment gains of 85.45 billion yen, down sharply from 2.81 trillion yen in the year-earlier period.
SoftBank's cumulative investment in OpenAI stood at $54.6 billion as of the end of September, with a fair value of $99.6 billion and a cumulative investment gain of $45 billion, the company said. The company noted that a potential increase in OpenAI's valuation following a new funding round had not yet been reflected in its results, pending an official announcement, and said the updated valuation could be reflected in the fiscal third quarter. A SoftBank executive said during the earnings call: "ChatGPT has been continuously a weapon of OpenAI, especially for consumers," highlighting the chatbot's growing user base.
Despite the quarterly loss, revenue rose 13.3% in the six months ended September 30, supported by growth in telecommunications and AI computing businesses. Shares of the Japanese investment giant closed 13.9% higher on Tuesday, as gains came amid an overnight rebound on Wall Street and rises in other Asian technology stocks including Samsung Electronics and SK Hynix.