SoftBank Lost $7.1 Billion on AI Data Centers

SoftBank Group, the Japanese conglomerate run by Masayoshi Son, which owns a stake in OpenAI (which created ChatGPT), announced a $7.1 billion quarterly loss — compared to an expected profit of 129 billion yen. Much of the loss ($3.7 billion) was due to a “write-down” on prepayments made to build out a data center in Ohio. Meanwhile, financing expenses jumped over two-fold to $2.9 billion during the quarter.

This is the first major indication that constructing data centers for artificial intelligence may be even more expensive than some heavyweight investors anticipated. SoftBank’s stock price has dropped over 50% since June, indicating to investors that there are risks involved in the AI boom beyond semiconductors and machine learning algorithms — but also in brick-and-mortar infrastructure. If anything, this should serve as a warning shot across the bow for those who are investing in OpenAI, Anthropic, and other data centers.