SoftBank announced it will absorb a $3.7 billion loss after calling off its purchase of gas turbines that were meant to power AI data centers. The turbines were reserved in 2025‑26 and represented more than 13 gigawatts of capacity – enough electricity to supply an entire small U.S. state. The decision wipes out a chunk of the firm’s earnings forecast for 2026. SoftBank’s chief executive Masayoshi Son had argued that owning the turbines would be "vital" to the company’s future earnings because the power would feed the massive AI workloads the group plans to host. At the time of the reservation, the company had locked up a larger share of global gas‑turbine production than any single customer before, effectively reserving more capacity than the state of Connecticut. The cancellation comes just days after SoftBank publicly denied Elon Musk’s claim that the firm was defaulting on its power‑supply contracts. The Wall Street Journal cited unnamed sources familiar with the orders to confirm the scale of the reservation and the resulting loss. Industry analysts note that the move reflects the volatility of the AI‑driven data‑center market. While demand for power is high, the cost of securing dedicated generation assets can be unpredictable, especially when projects are delayed or scaled back. SoftBank is not expected to re‑enter the turbine market in the near term. The company will likely look to other ways to secure power for its AI ventures, such as long‑term contracts with existing utilities or renewable‑energy deals.
Why the cancellation matters
For investors, the $3.7 billion write‑down signals that SoftBank’s aggressive bet on owning power infrastructure did not pay off, which could affect the stock’s valuation. For customers of SoftBank’s AI services, the loss may lead to higher prices or slower rollout of new data‑center capacity, as the firm seeks alternative power sources.
Why it matters
Investors now see a concrete risk in SoftBank’s strategy of buying its own power for AI data centers, which could lower the company’s share price. Existing and future AI customers may face higher costs or slower service expansion as SoftBank looks for other power‑supply options.
