Softbank loses $3.7 billion on canceled AI data center gas turbine orders days after denying Elon Musk’s claim it was defaulting

By early 2026, Japanese tech investment outfit SoftBank had reserved more power generation capacity than the entire state of Connecticut after cornering a huge portion of the global gas turbine production capacity. Now, the same company has chosen to take a $3.7 billion hit to its earnings after canceling reservations for the highly sought-after power generation hardware. The WSJ reports that SoftBank had reserved more than 13 gigawatts of power-producing turbines, citing unnamed "people familiar with the orders." That's the equivalent of more than six Hoover Dams' worth of capacity, with SoftBank founder and chief executive Masayoshi Son believing that it would be vital to the company's earning potential moving forward.

The gas turbines were to power AI data centers, and SoftBank is set to build a 9.2-gigawatt power plant in Ohio, with construction scheduled for early 2027. It'll cost $33 billion to build and will provide power to a neighboring eight-gigawatt data center. That data center will be leased to OpenAI, albeit only after Nvidia entered discussions about guaranteeing around $250 billion of financing for the project.

But SoftBank got ahead of itself. After initially planning to use the turbines for future gas-powered plants, the company has now chosen to change direction. Orders for turbines, engines that convert natural gas into the electricity used by data centers, must be placed years in advance of them being required. The company had bet big, placing huge orders with the expectation that demand would greatly outstrip supply. That would leave SoftBank in an enviable position, holding huge orders for the vital components required as part of a data center rollout boosted by AI demand. But those reservations weren't cheap — turbine manufacturers regularly charge customers tens of millions of dollars per gigawatt.

It's now canceled its remaining reservations with GE Vernova, its turbine supplier, while also unwinding contracts for orders that were too far gone. SoftBank told investors on a recent earnings call that the orders had been placed “to secure power generation equipment in anticipation of shortages,” but it now appears it anticipated a little too much.

Crucially, SoftBank is also keen for everyone to know that this move was voluntary and that it did not default on its orders. That's contrary to what xAI CEO Elon Musk claimed in a post on his X social network. SoftBank Chief Financial Officer Yoshimitsu Goto was quick to counter Musk's claims. “This is simply not correct at all,” Goto reportedly said. “There is no such default.”

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