SoftBank records $3.7 billion loss on revised AI power-equipment plans

SoftBank Group booked a ¥597.248 billion ($3.73 billion) loss for the six months ended September 30 after revising procurement plans for power-generation equipment tied to U.S. AI data-center projects, according to its earnings accounting briefing.

Two components made up the charge. SoftBank recorded ¥457.030 billion ($2.85 billion, rounded by the company to $2.9 billion) in non-refundable advance payments and ¥140.218 billion ($0.88 billion, rounded to $0.9 billion) for contract modifications and settlements. The advances had reserved manufacturing capacity and paid for equipment; the separate charge followed changes to the procurement arrangements.

Silver Bands 7 LLC entered into the contracts. SoftBank Group and SoftBank Vision Fund 2 have invested in the subsidiary, known as SB7, which arranged manufacturing-capacity reservations, equipment purchases and other procurement for power generation serving U.S. AI data-center projects. Those projects include the PORTS-Pike Technology Campus in Pike County, Ohio. SoftBank said it revised the strategy as requirements for existing and planned projects evolved.

From the previous fiscal year through September 30, SB7 made cumulative procurement payments of ¥1.500886 trillion ($9.48 billion), SoftBank’s consolidated financial report shows. The accounting briefing said $6.6 billion remained allocated to equipment purchases for PORTS-Pike and other projects. Another $2.9 billion was no longer included in the revised plan.

The contract changes also gave SB7 conditional rights to rebates of up to $2.1 billion on future equipment purchases over the next 10 years. SoftBank did not recognize those rights as an asset at September 30 because it could not determine the rebate amount. The timing and value of qualifying future purchases also remained undetermined.