SoftBank, Grab plan $1.85bn investment in Malaysia AI infrastructure

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 reported a $7bn quarterly loss, its first in nearly two years, due to a $3.7bn write-down on US data centre projects. The loss was driven by a reassessment of power generation strategies and declines in chipmaker stocks like Intel and Arm, as well as e-commerce firm Coupang. SoftBank's Vision Fund also posted a loss of ¥81.6bn. Additionally, China blocked its $5.4bn acquisition of ABB Robotics, citing regulatory concerns.

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.