SoftBank swung to a $7 billion loss on U.S. data center write-down

SoftBank Group experienced a first net loss in nearly two years as it absorbed a $3.7 billion writedown related to a U.S. data-center project, amid growing concerns over the viability of AI expansion. The Japanese firm's fiscal second quarter saw a ¥1.12 trillion ($7.1 billion) loss, primarily due to non-refundable advance payments for equipment and manufacturing capacity at its Ohio data-center facility.

Analysts had anticipated a profit of ¥129 billion. The decline in chipmaker stocks, including Arm Holdings and Intel, and the South Korean e-commerce giant Coupang, further impacted SoftBank's financial performance. The Vision Fund, which oversees investments in numerous tech startups, reported a loss of ¥81.6 billion, contrary to market expectations for a profit.

SoftBank's shares have plummeted over 50% since June, reflecting anxiety over the company's heavy debt obligations for major AI initiatives and apprehensions that recent Democratic victories in U.S. midterm elections might impede Son's projects. Despite holding a 13% stake in OpenAI at the start of October, SoftBank's shares have been highly volatile, with investors closely monitoring the risks and opportunities tied to its AI investments.

Recent reports suggest that Anthropic's valuation has dropped to as low as $1.1 trillion, down from an earlier estimate of $2 trillion.