America’s datacentre buildout is hurting Japanese giant Softbank, as the company reports $7 billion net loss; but remains optimist as CFO Yoshimitsu Goto sees much promise in …
The Japanese investment giant raised $56.5 billion during the July-September quarter, its highest ever quarterly total as founder Masayoshi Son continues to invest aggressively in AI. The company expects these losses to be offset by rebates for future purchases and said that it will be entitled to rebates of up to $2.1 billion on future purchases. As mentioned above, Softbank reported a quarterly loss of 1.1 trillion yen ($7 billion) far exceeding analysts’ forecasts and comparing with a 2.5 trillion yen profit in the same period a year earlier. Softbank has invested heavily in AI – spanning from data centres to robotics as well as the $64.6 billion purchase of a 13% stake in ChatGPT maker OpenAI . However, the company’s high AI borrowing has become a concern for some investors as its financing costs jumped to 462 billion yen in the quarter.
Because of hefty buildout costs for data centres in the US and increases in financing payments, reports Reuters, softbank has reported a $7 billion quarterly loss. The company said it logged a $3.7 billion loss due to advance payments for equipment in US data centre projects after plans changed.
“These data centre projects have only just begun, and we expect that over the next five or 10 years, they will grow further and become much larger in scale,” he told a press briefing as stated in the report. The quarterly results, as the report says, is expected to intensify questions about how well SoftBank will weather setbacks currently buffeting the AI sector. However, Softbank Chief Financial Officer Yoshimitsu Goto remains optimistic stating that data centre projects, which include a large-scale development in Pike County, Ohio, hold much promise. You use AI every day. Now get your AI Quotient. Take the AIQ test.