SoftBank Posts $7 Billion Quarterly Loss Amid Heavy AI Investments

Japanese investment giant SoftBank Group reported a net loss of $7 billion for the July–September quarter, significantly exceeding analysts’ expectations, as rising data centre development costs in the United States and sharply higher financing expenses weighed on its performance. The company recorded losses of $3.7 billion from advance payments for equipment linked to US data centre projects, including a major development in Ohio. Although SoftBank expects rebates of up to $2.1 billion on future purchases, the setback highlights the financial risks associated with its aggressive expansion plans.

Despite the quarterly loss, SoftBank raised a record $56.5 billion during the period as founder Masayoshi Son continued to strengthen the company’s position in artificial intelligence, data centres and robotics. Its investments include a $64.6 billion purchase of a 13% stake in OpenAI. However, financing costs more than doubled to 462 billion yen, while the company secured additional funding through loans and corporate bond issuances. SoftBank also increased its margin loan against its Arm holdings by $5 billion, taking the total to approximately $25 billion.

The results come amid growing investor concerns over the profitability and sustainability of the global AI boom. SoftBank shares have faced significant pressure, losing nearly half their value since the beginning of June, despite a sharp rally ahead of the earnings announcement. While gains from its ByteDance investment provided some support, declines in other portfolio companies added to market uncertainty. With rising borrowing costs, regulatory concerns and questions surrounding returns on massive AI investments, SoftBank faces increasing pressure to demonstrate that its ambitious technology strategy can deliver sustainable long-term growth.

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