Despite holding $430 billion in forward contracts, it still struggles to win over investors! SoftBank's SB Energy considers postponing IPO as $60 billion valuation meets a cold reception.

Title context: Despite holding $430 billion in forward contracts, it still struggles to win over investors! SoftBank's SB Energy considers postponing IPO as $60 billion valuation meets a cold reception. Text: SB Energy, the data center developer under SoftBank Group, which is led by Japanese investment legend Masayoshi Son, is considering postponing its initial public offering to as late as next year. The company is building a large artificial intelligence data center for OpenAI in Ohio, USA. Tech media outlet The Information reported on the 22nd that SB Energy is considering postponing its IPO to December this year or next year. The outlet reported in August that the company was aiming to list as early as September, meaning the listing timetable has already been significantly delayed. The change reflects rapidly cooling investor interest in IPOs of data center and AI cloud computing companies. Cloud computing stocks have recently traded volatilely, and yields on some CoreWeave corporate bonds have surged, prompting other data center developers to reconsider listing plans. Australian cloud service provider Firmus withdrew its IPO plan earlier this month. According to the report, SB Energy published its prospectus on the 2nd of last month and submitted a revised version on the 21st of the same month. Companies typically launch roadshows for IPO investors about two weeks after publicly filing a prospectus with the U.S. Securities and Exchange Commission. But when market conditions become volatile, the preparation period from filing to actual issuance can lengthen. SB Energy seeks to finance the Ohio data center through the IPO. The company plans to raise $5 billion to $7 billion, equivalent to about 6.61 trillion to 9.25 trillion Korean won, to build the facility that will be leased by OpenAI. The data center will use Nvidia chips, is planned at a scale of 8.5 gigawatts, and is backed by a $105 billion credit guarantee provided by Nvidia. Investment banks value SB Energy at about $60 billion, equivalent to about 79.35 trillion Korean won. However, The Information said IPO investors have already indicated that they find this valuation difficult to accept, because with the company not yet operating any data centers, the valuation is built entirely on expected future revenue. The Ohio data center accounts for most of the $430 billion in total contracted data center revenue SB Energy has signed. The company plans to phase the facility into operation starting in 2028 and to generate revenue through lease agreements lasting 15 to 20 years after operations begin. By comparison, SB Energy's revenue in the first half of this year was $139 million, or $278 million on an annualized basis. At a $60 billion valuation against that revenue, its price-to-sales ratio would exceed 200 times. The higher the price-to-sales ratio, the higher the valuation a company receives relative to its current revenue. The Information, citing a person familiar with the matter, said SB Energy executives are closely watching Anthropic's large IPO expected next month. Anthropic is seen as the first AI startup to go public; if its shares perform well after listing, SB Energy may move forward with its offering as early as December. $60 billion valuation meets cold reception: AI financing pressure is spreading from the bond market to the IPO market SB Energy's consideration of delaying its listing exposes the financing contradiction in AI infrastructure: "huge long-term orders, insufficient near-term cash." The SoftBank-owned data center developer originally sought to list as early as September and now is considering delaying to December or even 2027. The $5 billion to $7 billion it plans to raise will support the Ohio project leased by OpenAI. Investors' resistance to the roughly $60 billion valuation centers on the timing of revenue realization: the company has about $430 billion in data center contracts, but the related facilities are not yet in operation, and the main project is scheduled to come online in phases starting in 2028. Capital markets are reassessing how high a valuation today these forward rents can support, and how much more funding will be needed before construction is completed. The change comes after global assets have just experienced a long-term interest rate shock. The 10-year U.S. Treasury yield had previously risen to 5.34%, the highest since 2002, significantly raising the discount threshold for forward cash flows. However, the latest market action has already changed: a sharp selloff in tech stocks on October 22 triggered safe-haven buying, and U.S. Treasury yields fell by more than 19 basis points in a single day, standing at about 4.97% during Asian trading on the 23rd. Therefore, the more accurate current market narrative is this: although the benchmark yield trajectory has retreated, the credit risk premiums and equity financing pressure for AI infrastructure-related companies remain prominent. The stock market has fully reflected this concern. On October 22, the Philadelphia Semiconductor Index fell 6.7%, more than 26% below its June closing high; the Nasdaq Composite fell 2.60%. SoftBank Group fell about 6.9% in Tokyo the same day, retreating about half from its June high, and its credit default swap (CDS) prices had earlier risen to a near four-year high. Although SoftBank recovered most of its intraday losses on the 23rd and ended down only 0.02%, the short-term price repair has not changed the market's scrutiny of its financing burden. The credit market provides a more direct pressure indicator for SB Energy, the data center developer under SoftBank Group. A report on October 22 showed that the yield on a CoreWeave bond maturing in 2031 reached 15.76%, and its five-year CDS spread rose to 1,115 basis points; some media previously reported that its CDS pricing at one point corresponded to an implied five-year cumulative default probability of nearly 63%this probability includes credit risk premiums and model assumptions and cannot be directly understood as the company's actual probability of collapse. SoftBank itself has also paid a clearly higher financing cost: in September it announced the issuance of about $11.1 billion equivalent in foreign currency bonds, including 7.5-year dollar bonds issued at par with a coupon of 9.75%, with proceeds mainly used to pay for its investment in OpenAI and for general corporate purposes. CoreWeave's secondary market yield and SoftBank's new bond coupon together show that investors are demanding higher returns before they are willing to continue funding AI expansion. Orders lock in the future; financing determines whether the delivery process can be sustained SB Energy's key constraint is the timing mismatch between construction spending and rental income. Land, power connections, substations, machine rooms, and cooling systems require upfront investment, and only after construction is completed and delivery conditions are met can long-term leases gradually generate revenue. The $430 billion total contract value represents business scale spanning many years, not cash reserves, nor the present value of that revenue. A Reuters Breakingviews analysis pointed out that only about 10% of the related data center contract revenue is expected to be realized within six years; this also means that even if demand is real, the project still must raise enough funds before production begins and bear the financing costs that accumulate during the period. The $60 billion valuation divided by $278 million in annualized revenue corresponds to a price-to-sales ratio (P/S) of about 216 times; however, current revenue mainly comes from the existing energy business, while the future valuation mainly depends on data centers not yet in operation, and the two differ in business stage. What truly determines valuation tolerance is how much cash future rents can leave after deducting construction, operating, and financing costs, and when that cash will arrive. When benchmark interest rates for the corresponding maturity and issuer credit spreads raise the funding threshold, investors will demand a lower entry valuation; an IPO delay will in turn postpone equity replenishment, further increasing the developer's reliance on other financing channels. The $105 billion officially disclosed by Nvidia is a conditional guarantee cap, covering designated lease and power payment obligations corresponding to about 4.25 gigawatts of IT load at the Ohio campus. It usually takes effect as each phase of the lease begins and is triggered if specified tenants default; it is not cash already delivered to SB Energy, nor does it cover all project costs. The planned scale of 8.5 gigawatts mentioned in reports is not the same measure as the officially disclosed guaranteed scope; gigawatts measure power capacity and cannot directly represent model computing performance. The investment implication of the adjustment to SB Energy's listing plan is that the AI industry chain is drawing a stricter distinction between "having orders" and "having the funds to complete orders." The more solid the financing arrangements and the closer a project is to being energized and delivered, the greater the certainty that its procurement demand will revenue for chips, power equipment, and data centers. If Anthropic lists smoothly, it can test the market's acceptance of AI companies' growth and valuations and improve the subsequent issuance environment; but SB Energy ultimately still needs to persuade investors with its own project economics and financing structure to pay today's price for forward rents.