Why SoftBank Is Rushing SB Energy to the Public Markets

People used to complain that some private tech companies waited too long to go public. Thanks to the AI boom, now we’ve got tech companies going public with hardly any operating business at all. The latest example of that is SB Energy, a SoftBank-controlled solar and battery power firm that filed to go public on Tuesday.

SB Energy proudly proclaims, in big text early on in its IPO filing, that it is “Building World-Class Data Center and Power Infrastructure.” The key word there is “Building.” In much smaller print, nestled within vast reams of text extolling the virtues of its approach to AI data centers, is this phrase: “No data center capacity is currently in operation.” The only revenue SB Energy currently generates—a total of $213.5 million last year—came from solar and battery power generation projects. And assuming it builds the data centers it is planning over the next couple of years, SB Energy will only have one outside customer—OpenAI.

So far, to fund its data center ambitions, SB Energy has borrowed several billion dollars and raised equity from, among others, OpenAI and Nvidia. (The AI chip giant is also providing a financial backstop to SB Energy’s biggest data center project, located in Ohio, in case OpenAI can’t pay its bills.) You might wonder why SB Energy is going public right now. After all, its parent is a public company—why sell stock in such an early-stage subsidiary? No prizes for guessing the answer: SoftBank needs the money. The Japanese investment conglomerate is on an AI spending spree, raising money however it can, by either selling assets or borrowing against them. (Remember, SoftBank has borrowed money to invest in OpenAI and now plans to borrow more money using its OpenAI shares as collateral!)

Is SB Energy something any investor should touch? For sure, its marketing pitch—that it focuses first on getting power lined up for its data center projects rather than treating power as an afterthought—is perfectly timed for this moment. Elon Musk has been banging the drum lately about the energy crisis facing the data center industry, pointing out in a virtual appearance at a G20-related event on Tuesday that the tech industry faces a “crisis of power,” which will lead to a shortage of the power required to turn on chips next year. In that scenario, data centers developers whose projects already have power connections will be ahead.

But there’s plenty of reason to be wary of SB Energy. It’s hardly confidence-inspiring that the campus nearest to completion—by the end of this year—is one in Travis, Texas, that an affiliate of SoftBank itself will be leasing. SoftBank has announced plans to launch its own neocloud, by the way, so that’s presumably the purpose of this campus. (SB Energy also has to pay 1% of its gross profit to SoftBank as royalties under a trademark deal, which won’t help its profitability.)

Then there’s SB Energy’s dependence on OpenAI. SB has three other data center campuses under development, the biggest of which hasn’t even begun construction, that OpenAI will lease. (SB has land for a couple of other projects, but those are in too early a stage to have customers lined up yet.) And to think some investors have complained about CoreWeave’s reliance on a handful of customers!

In that sense, SB Energy is simply another way for SoftBank to support OpenAI. If investors want exposure to AI, they can buy into Nvidia, or OpenAI when it goes public (expected next year) or—if appetite for risk is unlimited—SoftBank itself. What does SB Energy really offer?2Musk’s MarketingMusk’s Marketing

Musk’s Marketing

You’ve got to hand it to Elon Musk—he’s always marketing. His virtual appearance before a G20-related group on Tuesday was marked by several promotions for one of his various businesses.

At one point, while talking about the coming power shortage for data centers, Musk went on a tangent to make a plug for his X platform (formerly known as Twitter). He encouraged event attendees to search for AI topics on X, noting that it’s “where all of the AI discourse takes place” and it’s “how I get my news.…Anyone who is anyone in AI posts on X.”

Earlier in his comments, he had talked up Tesla’s self-driving car technology, which he called a “tremendous boon to users,” and then highlighted the value of humanoid robots, also in development at Tesla. Humanoids will be “five times as productive” as humans, he said.

AI Comes to Toothbrushes

This could really overload data center capacity. Dyson, maker of high-tech vacuum cleaners and hair dryers, is coming out with an electric toothbrush, equipped with a camera powered by an AI machine-learning algorithm. Seriously.

The algorithm “analyzes 28 live images per second to identify and target gaps between teeth in real time,” with the device blasting a jet of water at areas of the mouth it deems necessary. (Images remain private to the user, Dyson says—as though anyone wants to see close-up video of someone’s teeth!)

And Dyson isn’t stopping there. It’s developed its own “nonfoaming toothpaste” to work with the device. Priced at a mere $499, the toothbrush is already listed on Amazon, available next week!