SoftBank, run by a 1980 Berkeley economics graduate, says it paid early to lock up scarce turbines and other gear for its American AI campuses; some of it no longer fits, but the Ohio site leased to OpenAI is not being scaled back, its finance chief said.
SoftBank Group, the Tokyo investment company founded and run by Masayoshi Son, reported a net loss of 1.12 trillion yen, about $7 billion, for its fiscal second quarter, which ended Sept. 30, swinging from a 2.5 trillion yen profit a year earlier, CNBC reported on Tuesday.
The single largest charge came from the company’s bet on American artificial intelligence infrastructure. SoftBank recorded a loss of 597.2 billion yen, about $3.7 billion, for the six months ended Sept. 30 because it changed its plans for buying power-generation equipment for data center projects in the United States. Cumulative payments for that equipment, for projects such as the PORTS-Pike Technology Campus in Pike County, Ohio, had reached $9.48 billion by the end of September, the company said.
Mr. Son, 69, earned a bachelor’s degree in economics from the University of California, Berkeley, in 1980, after arriving in California as a teenager. He founded SoftBank in Japan the following year.
Why the company bought early
SoftBank’s explanation is that power, not chips, has become the constraint on the A.I. buildout, and that the turbines, transformers and other gear needed to run large campuses can take years to arrive. “We made bridge investments in advance to secure power generation equipment in anticipation of shortage,” a SoftBank executive said on the earnings call, according to CNBC.
Yoshimitsu Goto, the chief financial officer, said the charge reflected a review of the company’s project portfolio and fast-changing equipment needs, not a retreat, Bisnow reported. Some equipment the company once expected to need is no longer the best fit, he said, while other components have been harder to obtain than expected. The canceled orders, he said, do not mean SoftBank is downsizing any current project. He did not rule out more such charges. “I cannot promise it’s not going to happen again,” Mr. Goto said.
Mr. Goto declined to comment on the effect of last week’s U.S. midterm elections on the company’s data center plans, Bisnow reported.
The OpenAI connection
The loss sits beside SoftBank’s largest single bet. As of Sept. 30, its cumulative investment in OpenAI, the San Francisco company that makes ChatGPT, stood at $54.6 billion, with a fair value of $99.6 billion, according to the company, CNBC reported. SoftBank said a higher OpenAI valuation from a new funding round had not yet been reflected in its results.
The Ohio campus, on the site of a former federal uranium-enrichment plant, has been leased in full to OpenAI for 20 years, for eight gigawatts of computing capacity. SB Energy, the SoftBank-backed developer headquartered in Redwood City, is building it and a gigawatt-scale campus in Milam County, Texas, also leased to OpenAI, Bisnow reported. SB Energy had planned an initial public offering in September and has delayed it.
SB Energy did not respond to a request for comment sent Wednesday. SoftBank Group does not publish a press email address and was not reached.
Shares of SoftBank rose 13.9 percent in Tokyo on Tuesday, as Asian technology stocks rebounded with Wall Street, CNBC reported. Shares of power-equipment makers including GE Vernova and Bloom Energy fell after the write-down, Bisnow reported.
Pledges made at the White House
The projects trace to Stargate, the joint venture of SoftBank, OpenAI and Oracle that President Trump announced at the White House in January 2025, with Mr. Son, OpenAI’s Sam Altman and Oracle’s Larry Ellison, as a private investment of up to $500 billion in American A.I. infrastructure. The venture was presented at its launch as a way to build the computing capacity for A.I. in the United States and to create American jobs, and the administration has counted it among the large investment commitments it has highlighted since taking office.
The write-down is a reminder of how much of that buildout depends on electricity. Developers across the industry have paid deposits years in advance to hold places in the queue for turbines and transformers, and analysts quoted by Bisnow said SoftBank was unlikely to be the only buyer that now finds some of its early orders no longer fit its plans.
For the Bay Area, the stakes run in both directions. OpenAI, which made up 21 percent of SoftBank’s holdings as of September, according to Bisnow, is headquartered in San Francisco, and SB Energy is based on the Peninsula; much of the computing power they are building will be used to train and run models designed here. But the power plants and server halls are being built in Ohio and Texas, where land and electricity are easier to come by. California’s own data center debates are about local power and costs, as in Oakland, which this week extended its pause on new data centers to October 2027.
The Inquirer last wrote about Mr. Son on Oct. 27, on his bets on Malaysia, the Gulf and a larger stake in OpenAI. This quarter’s results show the cost of moving first on the physical side of that strategy.
Marcus Thibodeaux covers UC Berkeley alumni in business, startups, venture capital, industry and government, from Sand Hill Road boardrooms to Sacramento and Washington, for the Inquirer’s Berkeley Alumni desk. More from Marcus Thibodeaux
