SoftBank Books $3.7 Billion Loss After Canceling 13 GW of Turbine Orders

SoftBank has taken a $3.7 billion hit to its earnings after canceling reservations for more than 13 gigawatts of gas turbine capacity — enough generation to match more than six Hoover Dams. The write-off, confirmed to investors on a recent earnings call, ends a speculative buying spree that had cornered a large slice of global turbine production for AI data centers.

By early 2026, SoftBank had reserved more power generation capacity than the entire state of Connecticut consumes, according to The Wall Street Journal, citing unnamed people familiar with the orders. Founder and chief executive Masayoshi Son had treated that position as central to the company's earning potential. The bill for holding it was not trivial. Turbine manufacturers regularly charge customers tens of millions of dollars per gigawatt simply to keep a reservation alive.

Why did SoftBank order so many turbines?

The logic was scarcity. Gas turbines — engines that convert natural gas into the electricity data centers consume — must be ordered years in advance, and SoftBank bet that AI-driven demand would greatly outstrip supply. Holding large reservations for a vital component would have left the company in an enviable bargaining position as data center construction accelerated.

SoftBank told investors the orders had been placed "to secure power generation equipment in anticipation of shortages." It appears the company anticipated rather too much. After initially planning to build future gas-fired plants around the hardware, SoftBank reversed course, canceled its remaining reservations with supplier GE Vernova, and unwound contracts for orders that had progressed too far to cancel outright.

What does the cancellation actually cost?

The immediate answer is $3.7 billion. The broader answer touches the company's flagship US project, which remains intact. SoftBank is set to build a 9.2-gigawatt power plant in Ohio at a cost of $33 billion, with construction scheduled to begin in early 2027. The plant will feed a neighboring eight-gigawatt data center that SoftBank will lease to OpenAI — an arrangement that took shape only after Nvidia entered discussions about guaranteeing roughly $250 billion in financing for the project.

The Ohio complex is the committed core. The turbine reservations were the optionality around it, and SoftBank has now paid for the privilege of discovering how little that optionality was worth.

Was this a default?

SoftBank insists it was not, and the timing matters. Days before the write-off surfaced, xAI chief executive Elon Musk claimed on his X social network that SoftBank had defaulted on a raft of data center turbine orders. Chief Financial Officer Yoshimitsu Goto moved quickly to rebut him.

"This is simply not correct at all," Goto said, according to reports of his remarks. "There is no such default."

SoftBank's own framing on the earnings call leaned the same way: the cancellation was voluntary, a strategic retreat from an oversized bet rather than a failure to pay. A $3.7 billion loss makes an odd trophy, but it is the price of walking away on one's own terms.

What does this say about the AI power race?

The episode is a rare quantified caution from inside the AI infrastructure boom. Demand for electricity remains real — SoftBank's $33 billion Ohio plant and its eight-gigawatt OpenAI tenant are proof of that — but the market for securing future capacity carried genuine risk. Manufacturers priced reservations accordingly, and a company that reserved more generation than Connecticut uses found the carry cost unsustainable.

For turbine makers such as GE Vernova, the unwinding of a 13-gigawatt reservation book returns capacity to a market where buyers, including Musk's own ventures, have been queueing for years. For SoftBank investors, the question ahead is whether the Ohio project's economics can absorb the loss and still deliver on Son's promise that power would drive the company's earnings.

The company has now paid $3.7 billion to find out how much scarcity was worth before it arrived.