Holding $430 billion in forward contracts still fails to impress investors! SB Energy, a SoftBank subsidiary, is considering postponing its IPO as its $60 billion valuation faces lukewarm reception

According to Zhitong Finance APP, SB Energy, a data center developer under SoftBank Group led by Japanese investment legend Masayoshi Son, is considering postponing its initial public offering (IPO) until as late as next year. The company is building a large-scale artificial intelligence data center for OpenAI in Ohio, USA.

Technology media outlet The Information reported on the 22nd that SB Energy is considering delaying its IPO until December this year or next year. The publication had previously reported in August that the company was aiming to go public as early as September, indicating a significant postponement of the listing timeline.

This change reflects investors’ rapidly cooling interest in IPOs of data center and AI cloud computing companies. Recently, cloud computing stocks have been volatile, and yields on some CoreWeave company bonds have surged, prompting other data center developers to reconsider their listing plans. Australian cloud service provider Firmus withdrew its IPO plan earlier this month.

The report stated that SB Energy publicly filed its prospectus on the 2nd of last month, and submitted a revised version on the 21st of the same month. Typically, companies launch roadshows for IPO investors about two weeks after publicly submitting their prospectus to the U.S. Securities and Exchange Commission. However, when market conditions become turbulent, the preparation period from filing to actual offering may be extended.

SB Energy seeks to finance the Ohio data center through its IPO. The company plans to raise $5 billion to $7 billion (approximately 6.61 trillion to 9.25 trillion KRW) to build the facility, which will be leased by OpenAI. The data center will use Nvidia chips, is planned with a scale of 8.5 gigawatts, and will receive $105 billion in credit guarantee support from Nvidia.

Investment banks value SB Energy at around $60 billion, or approximately 79.35 trillion KRW. However, The Information reports that IPO investors are finding this valuation difficult to accept, as it is entirely based on expected future income with none of the company’s data centers yet operational.

The Ohio data center accounts for most of SB Energy’s contracted data center revenue totaling $430 billion. The company plans to phase in the facility from 2028 and earn revenue through 15- to 20-year leasing agreements after operations commence. In contrast, SB Energy’s revenue for the first half of this year was $139 million, or $278 million annualized. At a $60 billion valuation, this means a price-to-sales ratio (P/S) of over 200 times. The higher the P/S ratio, the higher the company’s valuation relative to its current revenue.

The Information quoted a source saying that SB Energy executives are closely watching the anticipated large-scale IPO of Anthropic next month. Anthropic is seen as the first AI startup to go public; if its shares perform well after going public, SB Energy could move forward with its IPO as early as December.

$60 billion valuation falls flat: AI financing pressures shift from bond markets to IPO markets

SB Energy’s consideration of a delayed listing exposes the financing dilemma faced by AI infrastructure: “large long-term orders, insufficient short-term cash.”

This SoftBank-backed data center developer initially sought to go public as early as September, but is now considering postponing to December or even 2027. The planned $5-7 billion raise is intended to support the OpenAI-leased Ohio project. Investors’ resistance to the roughly $60 billion valuation centers on the timing of income realization: the company holds about $430 billion in data center contracts, but the related facilities have yet to commence operations, with main projects scheduled to come online in stages starting in 2028. Capital markets are reassessing: how much today’s valuation can be supported by these long-term leases, and how much additional capital will be required to complete construction before generating income.

This change comes after global assets recently experienced a shock from long-term interest rates. The 10-year U.S. Treasury yield previously climbed to 5.34%, its highest since 2002, significantly raising the discount hurdle for future cash flows. However, the latest data shows a shift: on October 22, a tech stock selloff triggered risk-off buying, and the Treasury yield fell more than 19 basis points in a single day, reaching about 4.97% during Asian hours on the 23rd. Thus, the more accurate current market theme is: while benchmark yields have declined, credit risk premiums and equity financing pressures for AI infrastructure-linked companies remain pronounced.

The stock market has fully reflected these concerns. On October 22, the Philadelphia Semiconductor Index fell 6.7%, down over 26% from its June closing high; the Nasdaq Composite Index dropped 2.60%. SoftBank Group fell around 6.9% the same day in Tokyo, retreating by about half from its June high, and its Credit Default Swap (CDS) prices reached their highest in nearly four years. Although SoftBank recovered most of its intraday losses on the 23rd, ending down only 0.02%, the short-term price rebound has not changed the market’s scrutiny of its financing burden.

The credit market has provided a more direct pressure indicator for SB Energy. Reports on October 22 show CoreWeave’s bond due 2031 yielding 15.76%, with its 5-year CDS spread rising to 1,115 basis points; previous reports noted that its CDS pricing implied up to a 63% five-year cumulative probability of default—this figure includes credit risk premiums and model assumptions, and should not be interpreted as the company’s actual probability of bankruptcy. SoftBank itself has also paid notably higher financing costs: it announced in September an issuance of foreign currency bonds totaling around $11.1 billion, with its 7.5-year USD bonds issued at par with a coupon of 9.75%. Proceeds are mainly used for payment to OpenAI and general corporate purposes. CoreWeave’s secondary market bond yields, combined with SoftBank’s new bond coupon, both illustrate that investors now demand higher returns to continue funding AI expansion.

Orders locked in for the future, financing determines ability to sustain delivery progress

The key constraint for SB Energy is the timing mismatch between construction expenditure and rental income. Investment in land, power access, substations, server rooms, and cooling systems must be made up front; only after construction is complete and delivery conditions are met can long-term rents gradually generate income. The $430 billion in contract value represents the scale of business over several years, not cash reserves, nor the present value of that income.

Reuters Breakingviews analysis notes that only about 10% of relevant data center contract income is expected to be realized within six years; this also means that even if demand is real, projects must secure enough funding before coming online and bear increasing financing costs in the meantime.

Dividing a $60 billion valuation by annualized revenue of $278 million yields a price-to-sales ratio (P/S) of about 216 times; but current revenue mainly comes from existing energy business, while future valuation mainly depends on yet-to-be-operated data centers—there is a difference in business stages. What truly determines the valuation’s resilience is how much cash will be left from future rents after deducting construction, operational, and financing costs, and when that cash flow will arrive. When benchmark rates for corresponding tenors and issuer credit spreads raise the funding threshold, investors will require lower entry valuations; IPO delays in turn postpone equity supplementation, further increasing the developer's reliance on other financing channels.

The official $105 billion disclosed by Nvidia is a conditional guarantee cap, covering rental and electricity payment obligations for approximately 4.25 gigawatts of IT load at the Ohio campus. These guarantees typically take effect with each lease period and are triggered under specific tenant defaults; this is not cash already delivered to SB Energy, nor does it cover all project costs. The planned 8.5 gigawatt scale cited in reports is not the same measure as the officially disclosed guaranteed range; gigawatts denote power capacity and do not directly indicate model computing performance.

The investment implication of SB Energy’s IPO plan adjustment is that the AI supply chain is now distinguishing far more carefully between “possessing orders” and “having the funds to fulfill those orders.” The more stable the financing arrangements and the closer a project is to being powered on, the higher the certainty that procurement demand will turn into chip, electrical equipment, and data center revenue. If Anthropic’s IPO is successful, it could gauge market acceptance of AI enterprise growth and valuation, and improve the environment for subsequent issuances; but SB Energy ultimately must rely on its own project economics and financing structure to convince investors to pay today’s price for tomorrow’s rents.