AI’s biggest cheerleader loses $7bn as data centre bets backfire

Softbank Group and ABB are in talks to revive a $5.4B robotics acquisition blocked by China. ABB's robotics unit generated $1.7B in revenue (9M YTD) but posted a $23M net loss. China's approval remains uncertain, with potential carve-out or alternative deals under consideration. Softbank aims to expand its AI and robotics capabilities.

SoftBank Group reported a $7.1 billion net loss in Q2, its first in nearly two years, due to a $3.7 billion writedown on an Ohio data-center project and losses in its Vision Fund. The company owns 86.4% of Arm Holdings and has borrowed $25 billion against 72% of its Arm shares, making Arm's stock performance crucial for SoftBank's financial health. Arm's unbilled revenue balance of $577.2 million, with a $300 million payment due by March, is a key figure to watch.

SoftBank and Grab plan a US$1.85 billion investment in Malaysian AI infrastructure, with US$1 billion from SoftBank, US$750 million from Grab, and US$100 million from PETROS. The funds will develop AI computing capacity in Sarawak and Peninsular Malaysia, with Grab leading the Peninsular project. The investment is part of a multi-year program to meet rising AI demand. The agreement supports Malaysia's AI Nation 2030 plan and may create jobs in engineering and technical fields.

SoftBank, Grab, and PETROS agreed to invest $1.85B in AI infrastructure in Malaysia, with SoftBank contributing $1B, Grab $750M, and PETROS $100M. The projects aim to provide AI computing capacity and support Malaysia's AI Nation 2030 plan. Grab's CEO will oversee development, and SoftBank agreed to a five-year lock-up on Grab shares.

SoftBank reported a $7B net loss in Q2, reversing from a $23B profit a year ago. Losses stemmed from US data center costs, interest expenses, and a $3.7B loss on AI-related power equipment. The company has heavily invested in OpenAI ($64.6B total), data centers, and robotics, but faces delays and regulatory hurdles. Arm's share price decline also impacted earnings. Vision Funds saw gains, with SVF1 up $2.4B. SoftBank's shares are down 16% year-to-date.

SoftBank reported a $7 billion quarterly loss due to U.S. AI data center charges and falling Intel shares, but its stock rose 13.9% as Asian tech shares rebounded. Revenue was 2.22 trillion yen, exceeding estimates, while the Vision Fund segment saw a loss. SoftBank's OpenAI investment is valued at $99.6 billion, with potential gains pending a new funding round.