Softbank's SB Energy files for IPO, says it's 'substantially dependent' on OpenAI

SoftBank Group Corp.'s SB Energy Inc., a company specializing in data centers and electrical infrastructure, has filed for an initial public offering (IPO). The unit's filing size is not specified. According to a report in the Wall Street Journal, SB Energy is planning to sell shares worth between $5 billion and $7 billion. Earlier sources to Reuters indicated that the company could be seeking a valuation exceeding $50 billion.

In the first half of the year, the company reported a loss of $3.2 billion on $139 million in sales. SB Energy's revenue primarily comes from energy infrastructure projects. The company operates a 900-megawatt solar farm in Texas, which powers a Google LLC data center. SB Energy is also constructing two energy storage facilities in California, including one with a 580-megawatt solar array.

The company's growth strategy is centered around its data center business. The company has a $430 billion project backlog. SB Energy's flagship project is a 10-gigawatt data center campus in Ohio for OpenAI Group PBC. The company plans to build a power plant and $4.2 billion worth of new power transmission lines to meet the campus' energy needs.

Nvidia Corp., a significant investor in both companies, is providing a "residual value guarantee" worth up to $105 billion for 4.25 gigawatts of capacity at the PORTS-Pike development. Nvidia has the option to backstop another 3.78 gigawatts later on. If Nvidia does not, OpenAI will need to secure a different guarantor. SB Energy's financial partnership with Nvidia also includes buying $1.5 billion worth of shares at the listing price.

The company's ability to develop both power and technology infrastructure is considered a competitive advantage. SB Energy plans to list its shares on the Nasdaq under the ticker symbol "SBE."