TL;DR
SB Energy's IPO is propped up entirely by circular financing between SoftBank affiliates, with its revenue almost entirely dependent on paper contracts with OpenAI — a company that cannot even afford to pay.
SoftBank's SB Energy is going public, and its prospectus is a textbook case of the emperor's new clothes — a company built on circular financing daring to knock on the stock market's door.
Money swirls within the family
Masayoshi Son shuffles money left and right: SoftBank invests in OpenAI, OpenAI rents Nvidia GPUs with that money, Nvidia uses the proceeds to buy servers from Taiwan, and the Taiwanese manufacturers turn around and buy GPUs from Nvidia. Round and round it goes, everyone books revenue, but where is the real customer?
Its biggest customer is its own brother
How absurd is SB Energy's business? 99.4% of its under-construction capacity is earmarked for OpenAI — a fellow SoftBank portfolio company and itself an investor in SB Energy. SB Energy expects to book $439 billion in revenue, but 97% of that arrives after four years and depends on OpenAI's ability to pay — and OpenAI's current revenue is less than a tenth of that figure.
Don't ask, just believe
The press should be telling investors: what you're buying is a pile of signatures and strips of land, from a company that hasn't built a single AI data center. Instead, most reports dutifully repeat that SB Energy has a huge contract with OpenAI and hundreds of billions in backlog.
In short: this isn't investing, it's playing house with the Son family.
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