SoftBank Group Corp. (9984) Earnings Call Transcript & Summary

Please welcome to the stage, Rich Hossfeld, Co-CEO of SB Energy.

Good afternoon, Pike County. Wow, this is amazing. Welcome, Secretary Wright, Secretary Lutnick, our distinguished community and guests, our partners at DOE and Commerce. Thank you for joining us for the PORTS Technology groundbreaking. Today, we start construction on a project that is years in the making and now a reality with the leadership and action of this administration. A 10-gigawatt AI technology campus, 10 gigawatts of new generation, $4.2 billion in grid investments, all fully funded to ensure affordable energy and America's AI leadership. 25,000 people contributed to building this historic PORTS project in the 1950s. And now 35,000 people will build the new PORTS Technology campus, transforming it into a beacon for not only the U.S. but the entire world. As we kick off today's groundbreaking, I want to recognize the 2,000 workers of the PORTS team. Many of them are here today. You have been working for decades to prepare for this moment. Before the outcome was clear, before today was guaranteed. You believed it would come. You welcome SoftBank and SB Energy into your community, and we will be here with you for a generation to come. Today, together, we watch the future of the PORTS Technology campus. Thank you.

Please welcome Tim Walsh, Assistant Secretary for the Office of Environmental Management at the U.S. Department of Energy.

Wow, is this amazing or what? Right here in Pike County. I love seeing all the yellow safety vests at heart. I'm a builder, I'm a construction guy, and I like seeing things built. So I am so excited to lead the Office of Environmental Management at the Department of Energy. And it's truly an honor to be here today on this historic occasion. When I drove through the Rolling Hills of Pike County, I arrived at the site and encountered these massive industrial footprint of buildings that once stood as a titan for the cold war era, I was truly awestruck. The Portsmouth Gaseous Diffusion Plant referred to as an A-Plant and soon to become the AI Plant. So you don't have to change the name much, is more than just a collection of steel and concrete and process piping. It is a monument to the high-stake era of American history. In 1952, at the height of the Cold War, the Atomic Energy Commission needed to rapidly expand its uranium enrichment process. While the name says Portsmouth, the site is actually built right here in Pike County because of access to the Ohio River, reliable electrical power and a strong workforce that's represented here today. Construction of the -- yes, it's okay to Clap. Thank you. Back then, construction was an astronomical feat. As Rich just said, at the peak, it employed over 25,000 workers. 2 years later in 1954, the plant began primary mission, which was using the gaseous diffusion process to separate uranium isotopes. The scale of the project was simply staggering. The 3 main process buildings cover nearly 100 acres or imagine 75 football fields of floor space under roofs. Peter Kiewit and Sons was a contractor back then, and they delivered the building or buildings, the whole plant, 25% below budget and 6 months ahead of schedule. Try doing that today. To keep the compressors running, the plant consume massive amounts of electricity. In fact, it was the largest power draw in the world when it was in operation. At one point, it used roughly the same amount of power as the city of Los Angeles. During the operations, the A-Plant employed about 800 workers and was an economic engine for the region. For nearly half a century, the plant operated 24/7. And I met some of you in the audience earlier that actually worked here when the plant was still operating. Its history is split into 2 main chapters or mission. First was for National Defense. Initially, the plant enriched on -- focused on enriching the highly enriched uranium for nuclear weapons and the Navy nuclear propulsion program. And second, it was for energy. Over time, the mission shifted towards low enriched uranium to fuel the growing fleet of nuclear reactors, lighting homes across the globe. As technology evolved and the cold war faded, the aging gaseous diffusion plant became too energy-intensive to compete with the modern centrifuge technology. So in 2001 in Richmond operations finally since and then the story of the A-Plant has shifted from production to decontamination and decommissioning. Today, approximately 2,400 workers, many of you represented here today are still on site safely, carefully dismantling the massive structures and cleaning up the environmental legacy behind. The Portsmouth Gaseous Diffusion Plant was a silent warrior of the 20th century. It provided the teeth for national defense and the fuel for the atomic age. As we look towards the future of the site, we honor the thousands of workers that labored here in these Ohio Hills and helped shape the course of global history. That brings us to today, where we are gathered to break ground on a new project of equally historic scale that will provide generational jobs and economic vitality once again to the surrounding communities. Thanks to President Trump and Secretary Wright's visionary leadership, challenging us to think big, just like the tent we're in today, we are embarking on the next era of American dominance. That dominance starts by significantly increasing electrical power production as a catalyst for reindustrialization. To provide context, the 10 gigawatts of new power generation that was just mentioned is 4.5x the electrical output produced by the Hoover Dam. This positions piked in as the epicenter for technological advancements in artificial intelligence and data-driven scientific and engineering discoveries. AI data centers are the factories of the modern digital age. As a builder at heart, I see land as it can be and not what it is. I see a bright future right here in Southern Ohio, the new leader in innovation and economic vitality. This time, instead of the power of the atom, the power of gas generation will produce electrons that data centers on this very site will turn into extraordinary intelligence to advance human flourishing. You, the community members and the workers here should be extremely proud of the vital role you play in America's national security and the role you'll continue to play in the next chapter of unleashing American ingenuity and prosperity. Finally, projects of this scale just don't happen by accident. It takes vision, leadership and a team to seize an opportunity to make it a reality. I want to start by thanking my DOE team for supporting this revitalization effort, starting with Joel Bradburne, who is the site manager here at one point and his visionary leadership, who saw the potential reuse of the site and Ankur Bansal, a senior advisor partnering with me on the AI data center initiative. I also want to thank Rich Hossfeld, the co-CEO of SB Energy, for his leadership and vision in pulling this project together in short order. I don't think Rich sleeps because I could text him any time day or night, and he would respond immediately. But we're in a very important time in human history, and we're going to win the AI race, and we're going to fuel it with first gas generation and the future of nuclear renaissance will happen. But most importantly, I want to thank Masa Son of SoftBank for dreaming big, committing significant amounts of capital to this project and leading this historic endeavor. I'm looking forward to seeing you during the construction progress this summer and being here with some really big scissors to cut the ribbon 2 years from now on the first AI data center. Thank you very much.

Please welcome Ohio State Senator, Shane Wilkin.

They reminded me, I may want to adjust the mic down so I can -- so you guys can hear me. But good afternoon. Who's excited? So look at this room, what a great day for Ohio, but specifically, what a great day for Pike County. Today, we're not just turning over dirt, we're turning a page. For generations, the people of Southern Ohio have shown resilience, grit and pride in their communities. In fact, all of us know the cold war was won right here at this site. You've built lives, raise families and never stopped believing in the future of this region. And today, that belief is being rewarded. This groundbreaking marks the beginning of a historic investment by SoftBank and its energy division, bringing one of the most significant power generation projects in the world right here to Pike County. To the SoftBank team, thank you. You made the right choice. But this project represents more than infrastructure. It represents opportunity, opportunity for thousands of workers who will help build this facility. Opportunities for families who will benefit from stable, long-term careers, opportunity for schools, businesses, communities that will grow alongside this investment. And perhaps most importantly, it represents confidence, confidence in Ohio, confidence in Piketon. But most importantly, confidence in each and every one of you that will build and work at this facility. It's the confidence that shows Southern Ohio is ready to lead in the next generation of American energy. Now in the essence of time, instead of calling out everybody that had things to do or had important roles in this, I just want to thank our local partners. I want to thank the state officials that I see seated. I want to thank our Feds and our utility partners as well. But I would be remiss if I did not recognize the leadership of President Donald Trump, whose administration prioritized American energy independence and helped foster the kind of international investment that made this project possible. Now alongside him is a guy that may know a thing or two about Ohio and specifically Appalachia, Vice President, JD Vance. Vice President Vance has been and remains a strong advocate for communities like Pike County, places that deserve investment, that deserve growth and deserve a real shot at long-term prosperity. Now while we look -- while we celebrate today with our ceremonial groundbreaking, let us not forget that we are also taking on a great responsibility. A project of this size and scale must be done right and time is of the essence. PJM expects demand to increase by more than 51,000 megawatts by 2040. So a 9,200-megawatt power plant represents nearly 20% of that expected demand increase and will support grid reliability going forward. Now we all want lower energy cost, and this plant will play a role, a very large role. This plant will help offset the current future supply-demand imbalance that can serve to bring down prices for consumers because we all know when supply decreases or stays flat and the demand goes up, regardless of the market we're talking about, prices go up. Now what does all this mean for this project? It means working together to ensure environmental stewardship, supporting our local workforce with training and opportunity, making sure the benefits of this investment are felt right here at home for generations to come. Because at the end of the day, success will not be measured in how big this facility becomes. It will be measured in how strong our communities become with this facility. In closing, let's recognize what this moment truly represents, a new beginning with much work to come and a renewed sense of pride for our entire region. And the future that is being built right here in Pike County. Southern Ohio is prepared and ready to lead the charge of American energy independence. This starts today right here and right now. Let's show the world once again what Southern Ohio can do. Thank you.

Please welcome Congressman, Dave Taylor.

How awesome is this? How long we waited for this? This is incredible. I'm so glad to be here. Many of you probably don't know me because I'm new to this, but I am very proud to be the United States Congressman for Pike County, and I'm honored to be here with you all today. This is an incredibly exciting day for me, and I know for everybody else in the room. Just as we did at scale years ago, we are getting back into the business of producing energy in a very big way. This location was pivotal in America win in the cold war, and it's poised to be pivotal in winning the technology race globally and drive the United States into the next 250 years of global leadership. The investment being made here is vital from the most local level providing jobs to the neediest Ohioans to the most international level of securing America's place on the world stage, which benefits all freedom loving people around the world. It's been said already by Mr. Wilkin, but it's important that we thank President Trump for his invaluable work. Sorry, Shane, what would you do to me? For President Trump's invaluable work in getting this project done. Special thanks to Secretary Wright and Secretary Lutnick for being here today and the incredible work they've done and also, of course, the amazing people at SoftBank and SoftBank Energy and last but certainly not least, the fine Americans, the fine Ohioans and the great Pike County folks that are going to get this job done. This project will transform the lives of hard-working Ohioans, invigorate local economies and reaffirm Ohio's place as a leader in energy production. I look forward to working with the Senators Moreno and Husted to ensure the success of this project, and I know they'd be here with us today, but they're in Washington, D.C. doing the hard work of reopening the agencies to keep us all safe in these very dangerous times. So respect their work. They've been an amazing team, and we wish they were here, and I know they wish they were here as well. I thank you all for having me here. I can't tell you how excited I am for all of you. I'll be out here, keeping close tabs on this and doing all we can on the federal side to make sure this is a complete success. God bless you all, God bless America.

Please welcome Satoshi Miura, President, Japan External Trade Organization, New York.

Ladies and gentlemen, distinguished guests, thank you very much for inviting me to today's very special ceremony. And it's a great honor for me to be a part of. This is truly historic occasion. First of all, let me express my sincere congratulations to -- on the official launch of this project and today's groundbreaking ceremony. This moment marks not only the start of construction, but also the beginning of a new chapter in U.S. Japan economic corporation. This project is especially meaningful because it represents one of the very first tangible outcome of the U.S. Japan investment agreement. Turning bilateral agreements into real on-the-ground project is never easy. So I would like to commend all those involved for making this happen. This -- the strategic importance of this project is clear. We are living in an era where artificial intelligence and data centers are becoming an essential infrastructure of economic growth, innovation and national competitiveness. Reliable and scalable energy supply is the foundation of this digital transformation. Without stable energy, AI cannot survive. My organization, Japan Trade Organization, our job is -- we are the official agency of the Japanese government and our job is to trade promotion and the investment promotion. So we are proud that Japan is the #1 investor among all the investing countries across the world. And also, we are the biggest job creator in manufacturing sector in the U.S. And here in Ohio as well, there are roughly 270 companies there. And so in terms of the number of companies, Japan is again the #1 investor in Ohio. And the story does not end here. And looking ahead, Japanese companies are showing -- continue to show strong interest in doing business in the United States and JETRO is committed to help those Japanese companies to come here and invest more in the United States. And this project itself is a powerful example of how U.S., Japan economic cooperation can create new business opportunities for Japanese companies and including many of those gathered here today. So seeing this cooperation translates into real investment and real growth is deeply encouraging for us. So finally, I would like to express a sincere appreciation to the organizers, our partners and local stakeholders who have made today possible. And I wish this project every success and a bright future. Thank you very much.

Please welcome Marc Reitter, President and Chief Operating Officer of American Electric Power, Ohio.

Normally, thunder is not a good thing for my job. Well, good afternoon. I'm going to start by thanking Secretaries Howard Lutnick and Chris Wright; SoftBank Chairman Masayoshi Son; SB Energy Co-CEO Rich Hossfeld; Congressman Dave Taylor; Ohio Senator Shane Wilkin and all the local Pike County community leaders and officials. Thank you. Obviously, this is an exciting day. This site has a storied history, providing critical support for both national defense and energy security. And today, we are adding a new chapter to that story. SB Energy's investment here in Piketon is historic. And together, we usher in a new model for how to align new infrastructure costs and investments for technology campuses. This innovative partnership that includes SB Energy, the U.S. Department of Energy and AEP Ohio will not only build $4.2 billion of new electric transmission infrastructure to support this project, but the partnership agreement will also protect residents and businesses in Ohio from shouldering the cost. SB Energy has committed to paying for all of the new electric transmission infrastructure required. And that speaks to their commitment to our state in this region. From 1920 until the early 2000s, energy executives thought in terms of megawatts. From 2010 through 2020, many changed their thinking to kilowatts as electric use was flat or in many places, declining. Now we think in terms of gigawatts. We're navigating a generational super cycle, trying to thread the needle between executing on our obligation to bring electricity to all customers who need it and ensuring the cost of that electricity are divided fairly. This new data center campus is a significant electric infrastructure investment. When we are done, it will bring 10 gigawatts or 10,000 megawatts of power to this historic site. And for context, AEP Ohio serves 1.5 million customers across 61 of Ohio's 88 counties. When we are done with this project, we will more than double our demand profile. Electric transmission infrastructure is the backbone of economic development. It powers manufacturing, research and development, small business and residential growth. This project is especially meaningful for me as a native Ohioans and a current Board member of the foundation for Appalachia, Ohio. I'm also proud of the engineering prowess American Electric Power brings to the table. AEP pioneered 765 kV transmission and owns and operates the most 765 kV transmission in the country. Representatives from AEP Transmission are here with us today, and they have started planning and developing designs for the new lines needed to support this project. Building these lines will take hundreds of skilled workers, and it will provide opportunity for additional economic growth by creating a new energy backbone in the region. We look forward to our continued partnership with the administration, SoftBank, SB Energy and our communities across Ohio as we work together to enable growth and strengthen America's energy future. Thank you.

Please welcome Masayoshi Son, Chairman and CEO of SoftBank Group Corporation.

I need to lower the microphone. I want you to remember today for all of you as a historical day. Why historical day? I want you to understand what we are building in this technology campus is the largest, most powerful intelligence in the world. Here in Portsmouth, Ohio. I want you to understand we are talking about 10 gigawatt power, 10 gigawatt power to do what? To do -- to create the most smartest intelligence of the world, as I said. Let me tell you about the scale. This 10 gigawatt of intelligence is bigger than total artificial intelligence in the world today in one location, bigger than Google, Amazon, Microsoft, OpenAI, Anthropic, Oracle, everybody added together of all of the world, all of the company, every company, every model of ChatGPT, Gemini, Anthropic, all of this added together, bigger than all of them added together, that's the size we are building here in one campus. Let me tell you the scale, 10 gigawatts represent the 10 nuclear power plant scale of power generation in one campus. So that's the size we are talking about. This is a size bigger than any power plants, I think, in the world. At least in the U.S., for sure, this is the biggest power generation in one location, probably bigger than any place in the world. So the size that we are talking about in terms of the dollar investment -- in one campus, we are making $500 billion investment in one shot. That is a number of investment I have made a commitment to President Trump, the first day he stepped in as the President of the United States last year as a second time. The first day of his operation in the office, we made announcement as a [ state ] $500 billion, but that was intending to do many, many campus in many projects, but here, I say, I changed the word I said. Instead of many locations, many years, total $500 billion as a vision, now we are delivering $500 billion in one campus. Let me tell you one more thing. We are investing chip and system on top of power plants plus the data hall and so on, all of that together is $500 billion. But every 5 years, we are replacing, upgrading the chip and system. That is additional more than $300 billion. So over 20 years, we are adding additional $1 trillion in this campus. So this is one project that has total of $1.5 trillion. And that will stimulate the whole industry of chip and system, cabling, power, all the related equipment on top of the industry to the medical industry, the educational industry, physics, science, all of the things that we live is stimulated and accelerated innovation with a super intelligence. So this is the center of our super intelligence. So it's a great thing. It's a great excitement historical day. But people -- some people start to criticize recently, oh, AI data center will take too much power, and that will increase the electricity bill for the local community, that is not good. So people start to say, "Hey, is it a good thing?" I would say, well, that negative aspect of electricity bill going up, I will commit right now right here. We will protect the electricity bill. Because we would not take the electricity away from the grid. We would generate entire electricity that we use in our compute by ourselves. We here create a new generation of entire 10 gigawatt, all of the consumption that we use for our intelligence, we generate, self generate. So therefore, we are not taking any electricity away from the grid. Therefore, the price is supposed not to go up, and we are investing $4.2 billion to support upgrade the network of electricity grid so that it will actually help probably reduce the cost of overall for the community and increase the efficiency. And on top of that, we would like to donate $40 million to the local community, for the children, for the school, for the medical, for the road. So I lost my father a couple of years ago because of the cancer unexpected. Our doctors and the hospital could not find early enough. I cried, cried, cried. If we had a super intelligence, if we had a better technology, my father could have lived a few more years. So why technology is needed? It's not just productivity or money or reputation. It's for helping people. I truly believe that technology is to make people smile again. Thank you very much.

Please welcome Howard Lutnick, United States Secretary of Commerce.

Well, it is amazing to be here. I want to start by making sure I thank representative Dave Taylor; your State Senator, Shane Wilkin; Satoshi Miura, who is the President of the Japan Trade Association. Thank you guys. I really appreciate it. And you're going to meet my partner, Secretary Chris Wright, who he and I have worked together to create this historic project. So today is the groundbreaking of the first project that's come from the Japan Invest America Fund, which was generated by the $550 billion trade deal that I negotiated with President Trump between the United States and Japan. See, you've never heard of a project like this before, right, a $33 billion project, right? The largest industrial project, obviously, in the history of Ohio, the largest -- one of the largest, if not the largest industrial project in the United States of America because it's never been done before because this is the trade policy of Donald Trump. We negotiated with the Japanese, they wanted a lower tariff. And in exchange for a lower tariff, they committed $550 billion for America to invest in its national and economic security. And the first project we've selected is this gigantic gas-fired power plant right here in Portsmouth, Ohio. So we're operating in Trump time, okay, which means it was just a month ago that this deal was announced, a month ago. And now we're here with shovels going in the ground to get this baby going, all right? These are projects that need to deliver for America. So let's take a minute and understand the thinking of Donald Trump. See NAFTA, you remember the North American Free Trade Agreement. That agreement signed in the early '90s, basically gutted Ohio and Michigan and the great industrial parts of our country because what it did is it opened the borders of Canada and Mexico. So our industrial companies would move the production there, break our unions, get cheaper labor and basically really good for the corporate globalists, but really bad for wonderful American citizens, right? And the key to Donald Trump's trade policy. President Trump's trade policy is crystal clear. It's America first, America's workers first. Now when you talk about industrial policy, it sounds kind of boring, but let me explain what industrial policy is. Industrial policy is going to produce 4,700 construction jobs right here right now. So I'd like to -- I've heard Masa Son said this is like, this gas-fired power plant is so big. It's the equivalent of 10 nuclear reactors. I'd like to call it 2,700 wind turbines that only work when it's windy. So you know the President, he delivered the largest tax cut in American history, the largest investment in rural health in history. And now we're going to do the largest construction project in history. So we are focused on unleashing American energy. So we, the Japanese government in partnership with the United States Federal government is financing this project. This is not a project with debt. This is not a project that won't finish. This is a unique model in the world, and this is the first of its kind, right? This will produce reliable, affordable energy in the United States of America. It will drive down the price of local electricity. That is the model of where we come from. We are going to assure you the price of energy is not just going to be stable, to heck with that. We are going to drive it down because you are going to have one of the greatest power generations right here in your backyard, you're going to build it, you're going to operate it, and then it's going to deliver for you lower energy prices, right, for your lifetime. And that is what is amazing about this project. So President Trump and Vice President Vance, they didn't forget the people of Ohio. They're not going to forget real Americans. This is the example of Donald Trump's trade policy. This is the revitalization, the reshoring, the building back of American industry here, and it starts right here in Portsmouth, Ohio. I am honored to be here. I am honored to have played the role that I did in creating this fund. And now I'm going to turn it over to my great friend, Secretary Chris Wright, who's my partner through all of this. Thank you all. And God bless Portsmouth, Ohio and God bless America.

Please welcome Chris Wright, United States Secretary of Energy.

Thank you, Pike County. Thank you for bringing America back. Thank you for making America great again. President Trump's agenda is in this room, it's in your hearts, it's in your souls, it's in your community. To believe in America that's greater for our children, for our grandchildren that has better job opportunities, more affordability, more optimism, more security, more belief in our future, America has to stand up again. We have to believe in ourselves. We have to invest largely and build big things again. As you heard already, this project, this facility that's going to be built here is bigger than any facility ever built in world history. This is going to be a gigantic factory and ecosystem that will build intelligence, take electricity and turn it into innovation, turn it into opportunity, turn it into medical advancements, so that cancers will become manageable conditions as opposed to death sentences. You heard Masa's personal story about that. That intelligence is going to be critical for our national defense. It's going to be critical for our quality of lives. But this is think of the pivot President Trump made. The previous administration thought success was to tear down big things, take coal plants down, take natural gas plants down, shrink our industry because we were afraid of the future, tell our kids that they should be fearful of their future, that they should learn to live with higher costs and that they should understand opportunities may be shrinking, not growing. That's not America. That's not what's in our hearts. That's not the history of our nation. President Trump knew we have to lean in, we have to believe in America. We have to make big bets. We have to grow. We have to -- we have to change if we're going to continue to lead. I'm so proud of his leadership. I'm so proud of Secretary Lutnick before me, and I'm incredibly grateful for our tremendous partners with both the government of Japan and SoftBank, just a giant technology pioneer that believes in America, that believes in Ohio and that believes in Pike County. There's a reason we're here. There's a reason all of us didn't travel out to San Francisco, California. There's a reason. This is a community with strong hard-working people that want to build America back, that believe in this country, that want to leave this country better, stronger, more -- with more pride and more optimism in the future than when you arrived. You can't do that everywhere. These giant projects, there's communities that are going to work and there's communities that aren't considered. There are still states that don't want to build new things. They don't mind imposing higher costs. They're not optimistic about the future. That's not Ohio. That's not Pike County. I want to -- let me conclude with a summary of the points you've already heard, which is that this massive investment is going to create a lot of jobs, and there's going to be other industries that will come in here to be near this energy production, to be near this intelligence generation that will want to locate here. And when a lot of businesses come in, it creates a lot of jobs. And what does that do? That raises wages. That raises wages. But at the same time, we're going to produce so much energy that we're going to raise wages and lower costs. Is anyone against that agenda? Funny enough, the previous administration was against that agenda, but that was nonsense. President Trump came back to bring back common sense, to believe in America again, to believe in you. And all of us that are here today that traveled from out of town are here because we believe in you. The largest bet on a construction facility ever made in human history is right here, and you should be incredibly proud of that. That's a vote of confidence in you. That's a vote of confidence that we'll build a better future together and that we love our children, our grandchildren, we love our country, and we believe our futures. God bless Pike County, God bless Ohio, God bless President Trump's leadership and God bless the United States of America.

Thank you so much for joining us at the PORTS Technology campus celebration. Enjoy your weekend, and please drive safely.