THE CRUNCH
SoftBank has taken a $3.7 billion hit to its earnings after canceling reservations for gas turbines it had stockpiled to power AI data centers, according to a report citing people familiar with the orders. The Japanese investment group had reserved more than 13 gigawatts of turbines, more than six Hoover Dams' worth of capacity, after cornering a large share of global turbine production. By early 2026 that reserve exceeded the power generation capacity of the entire state of Connecticut.
Turbine orders must be placed years in advance, and manufacturers regularly charge tens of millions of dollars per gigawatt. SoftBank had bet that demand would greatly outstrip supply, leaving it holding scarce equipment for a data center rollout. Instead, it has canceled its remaining reservations with supplier GE Vernova and is unwinding contracts for orders too far along to simply drop.
The turbines were destined for gas-powered plants, including a planned 9.2-gigawatt facility in Ohio costing $33 billion, with construction scheduled for early 2027. That plant would supply a neighboring eight-gigawatt data center leased to OpenAI, a project that moved forward after Nvidia entered discussions about guaranteeing around $250 billion of financing.
SoftBank is keen to stress the cancellations were voluntary. That matters because xAI chief executive Elon Musk had claimed on X that the company was defaulting on its orders. Chief financial officer Yoshimitsu Goto pushed back quickly: "This is simply not correct at all. There is no such default." On an earnings call, SoftBank said the orders had been placed "to secure power generation equipment in anticipation of shortages," an anticipation that now looks to have overshot.