SoftBank Books $3.7 Billion Loss on AI Data Center Procurement U-Turn

SoftBank Group booked a ¥597.2 billion ($3.7 billion) loss after rewriting its procurement plan for power-generation equipment at U.S. AI data center projects, the company's financial report showed on November 10, 2026. The charge pushed net loss attributable to owners of the parent to ¥1.1 trillion for the quarter ended September 30, 2026, a swing from ¥2.5 trillion in net income a year earlier.

The loss breaks into two pieces: $2.85 billion in non-refundable advance payments and $0.88 billion in contract modifications and settlements. Both stem from Silver Bands 7 LLC, a subsidiary backed by SoftBank Group and SoftBank Vision Fund II-2, which had reserved manufacturing capacity and committed to equipment purchases to lock in power-generation hardware ahead of anticipated supply constraints. It revised that strategy as requirements changed at existing and planned projects.

What exactly did SoftBank write off?

The derecognized advances covered equipment that no longer fits the revised procurement plans. SoftBank's accounting separates the advances already paid from cash payments tied to contract modifications and settlements, which the company expects from the third fiscal quarter onward. That distinction matters: the cash outflow on the settlement side has not fully landed yet.

Silver Bands 7 is separate from SB Energy, according to the company's records. The clarification is doing quiet work here — it signals the write-off sits inside a data-center procurement vehicle, not SoftBank's broader energy arm.

The scale of the original bet is visible in the cumulative figures. Procurement payments totaled $9.5 billion from the previous fiscal year through September 30, 2026. Of that, $6.6 billion remained allocated at quarter-end to equipment purchases for the PORTS-Pike power-generation project and other projects. Silver Bands 7 also secured rights to rebates of up to $2.1 billion over the next 10 years on future equipment purchases — but the amounts are conditional, and SoftBank recognized no asset for those rights because the value remains undetermined. In plain words: SoftBank is counting on rebates it cannot yet put a number on.

How deep does the earnings damage run?

The procurement charge was not the only pressure on results. Total investment gains fell 56.0% year over year to ¥1.73 trillion for the six-month period. Finance cost more than doubled to ¥790.7 billion, which SoftBank attributed to larger borrowing and corporate-bond balances, higher funding rates, and full recognition of remaining unamortized financing costs when bridge loans were repaid early.

The financing line deserves scrutiny. Early bridge-loan repayment triggered immediate recognition of costs that would otherwise have spread over years, and the company is carrying materially more debt at higher rates. The write-off is a one-time reset; the funding bill is recurring.

Are the U.S. data center projects still alive?

Yes — and SoftBank has drawn the line explicitly. The company characterized the procurement loss as unrelated to PORTS-Pike. Its portfolio summary continued to list the Pike County, Ohio, campus as preparing for construction, with 8.0 gigawatts of IT capacity and a 20-year OpenAI lease signed August 17, 2026. The Milam County, Texas, data center remained under construction, with 753 megawatts of IT capacity and a 15-year OpenAI contract.

SoftBank's earnings presentation framed the advance equipment spending as bridge investment made ahead of shortages, with recovery expected through project financing. Under its illustrative structure, a special-purpose company would fund data-center buildings and power infrastructure through non-recourse project finance, while the offtaker supplies servers and other IT equipment. That structure, if executed, would keep the construction debt off SoftBank Group's balance sheet — but the presentation calls it illustrative, not committed.

The records distinguish a costly procurement reset from a cancellation of the two U.S. campuses. Whether SoftBank can actually recover the remaining bridge investment through project financing, and satisfy the conditions attached to that $2.1 billion rebate pool, will determine the true long-term cost of buying power infrastructure early.