SoftBank reports $7.1 billion loss amid rising AI infrastructure costs

Japanese investment holding SoftBank Group (TSE: 9984) reported a net loss of 1.12 trillion yen, or about $7.1 billion, for the second quarter of the 2026 fiscal year ending September 30. A year earlier, the company posted a profit of about 2.50 trillion yen, while analysts surveyed by Bloomberg expected a positive result of 129.32 billion yen. Thus, the actual results were significantly worse than market forecasts.

According to the report dated November 10, financial performance was affected by changes in the value of investment assets, revised expenses for artificial intelligence infrastructure, and increased debt servicing costs. Meanwhile, the group's revenue for the quarter rose by approximately 15.6% to 2.22 trillion yen, highlighting the difference between the results of the holding's operating businesses and investment profits.

Why SoftBank Reported a Loss

One of the largest negative factors was the revision of plans to purchase energy equipment for the construction of data centers in the US. For the six months ending September 30, SoftBank recognized a loss of 597.25 billion yen, or about $3.73 billion, related to changes in procurement conditions and previously concluded agreements.

Of this amount, 457.03 billion yen was due to non-refundable advance payments, and another 140.22 billion yen was related to contract changes and settlements. The expenses are associated with infrastructure projects, including the construction of a technology complex in Pike County, Ohio, USA. At the same time, the company received a conditional right to discounts on future equipment purchases of up to $2.1 billion over ten years, but this potential compensation has not yet been recognized as an asset.

Additional pressure came from the rising cost of borrowing. In the second quarter, SoftBank's financial expenses reached 461.9 billion yen compared to 174.7 billion yen for the same period last year. The company raised funds through loans and bonds, including financing secured by its stake in British chip developer Arm.

Vision Fund's Investment Results Remained Positive

The overall investment result of SoftBank Group for the quarter was negative, amounting to −133.59 billion yen. Meanwhile, the holding's investment division recorded a loss of 303.88 billion yen, while the SoftBank Vision Funds achieved an investment profit of 245.56 billion yen.

Despite the positive result, Vision Funds' profit decreased compared to the same period in 2025, when it amounted to about 2.76 trillion yen. The investment business results were affected by changes in asset values and unfavorable dynamics of certain portfolio companies. In particular, the decline in technology company stock prices heightened concerns about the future returns on AI investments.

An important area for SoftBank remains its stake in OpenAI. As of September 30, the holding's total investments in the company reached $54.6 billion, with a fair value estimated at $99.6 billion. After completing another funding round in October, the total amount of invested funds increased to approximately $64.6 billion, with SoftBank's stake at about 13%.

SoftBank Shares Remain Under Pressure

Amid investors' reassessment of AI industry prospects, SoftBank shares have significantly declined. A month before the report's release, they lost more than a quarter of their value, and since early June, the decline has approached 50%. The pressure on the stock is also related to concerns about the return on large investments in computing power and data center construction.

However, on November 10, before the report's release, SoftBank shares rose by nearly 14% on the Tokyo Stock Exchange. Thus, the stock's performance during a single trading session differed from its more prolonged decline.

Despite the quarterly loss, the company continues to develop AI infrastructure and finance new projects. However, the rising costs of data center construction and debt servicing remain significant factors in its financial results. The future returns on these investments will depend on the development of projects and demand for computing services.