SoftBank Takes $3.7B Turbine Charge on Cancelled AI Power Orders
3 min readSoftBank Group has written off 597.2 billion yen, about $3.7 billion, on gas turbines and other power equipment it prepaid for AI data centers and no longer needs. The SoftBank turbine charge pushed the Japanese conglomerate to a 1.12 trillion yen quarterly loss, its first in nearly two years, and it is the sharpest warning yet that parts of the AI buildout were ordered faster than they could be used.
Why SoftBank Was Buying Turbines
Hyperscale AI campuses need gigawatts of power, and grid connections can take years. So SoftBank, through a vehicle called Silver Bands 7 that it co-owns with Vision Fund 2, paid deposits to lock in generation equipment ahead of its U.S. data center plans, including the 8 gigawatt PORTS-Pike campus in Ohio that carries a 20-year OpenAI lease. Cumulative payments through that vehicle reached about $9.48 billion over 18 months, according to Capacity, citing CNBC. Reports put the reserved turbine capacity at more than 13 gigawatts, well above the 9.2 gigawatt plan SoftBank announced in February.
What the SoftBank Turbine Charge Covers
SoftBank disclosed the charge alongside fiscal second-quarter results on November 10. Of the 597.2 billion yen, 457 billion yen is non-refundable advance payments and 140.2 billion yen is contract changes and settlements. Analysts had expected a 129 billion yen profit; higher finance costs and weaker investment gains deepened the loss.
The disclosure came days after Elon Musk posted that SoftBank was defaulting on its turbine orders, a claim CFO Yoshimitsu Goto flatly denied, saying there was no such default. Goto has since described a thorough reassessment of procurement strategy, while the company says it has no plans to downsize the Ohio project. Roughly $6.6 billion of prepaid equipment remains assigned to projects.
Why It Matters
SoftBank shares fell as much as 11 percent in Tokyo the day after the results, and the shock spread to power suppliers: GE Vernova dropped as much as 9.9 percent before saying the disclosure had no financial impact on it. Noreva CEO Peter Gardett called the charge price discovery finally happening, a view that turbines, transformers and generators were booked on demand forecasts that have not all materialized.
The timing is awkward for a company that in the same week signed a $1.85 billion deal with Grab and PETROS to build AI data centers in Malaysia, a story AI Incider covered on November 10. SoftBank has not linked the two announcements. Watch whether other AI developers follow with their own equipment writedowns, and whether turbine makers start to see cancellations spread.