SoftBank's data center subsidiary, SB Energy, has postponed its initial public offering (IPO), which was initially planned for this month. The delay stems from investor skepticism regarding the company's lofty valuation target of $50 billion or higher. Underwriters reportedly struggled to generate sufficient buyer interest at the price range proposed by SB Energy and its bankers.
The postponement of SB Energy's IPO also comes amidst a broader trend of data center companies delaying public listings due to factors such as local opposition to power-intensive facilities, high interest rates, and uncertain development demand. Other companies like Holtec and Aggreko have also slowed their IPO processes. This market sentiment suggests a mildly negative outlook with a sentiment score of -0.38 for the sector.
Adding pressure to SB Energy's IPO plans is the recent delay of OpenAI's own stock market listing. SoftBank has a substantial commitment of over $60 billion to OpenAI, and the AI company's valuation directly impacts SoftBank's financial health. Despite a claimed backlog of $439 billion in future revenue, mostly tied to 8.8 gigawatts of planned data center capacity, SB Energy currently has no operational data centers, with much of the projected revenue expected to materialize from 2034 onwards. The company projects needing over $170 billion for its planned data center construction, with OpenAI anticipated to be a major tenant and Nvidia having guaranteed $105 billion for the initial phase of an Ohio project.
