SoftBank’s $3.73B charge sends GE Vernova shares nearly 10% lower

By Tom Whitfield

SoftBank booked a ¥597.2 billion ($3.73 billion) loss tied to revised power-equipment procurement for U.S. AI data centers, including the planned PORTS-Pike Technology Campus in Pike County, Ohio. The charge was the largest single item in SoftBank’s $7 billion quarterly loss, according to MLQ.ai.

GE Vernova shares opened Tuesday nearly 10% lower and closed down less than 4%, CNBC reported. Investing.com put the morning decline at 6.1%, reversing a 7.1% gain from Monday, after Reuters reported SoftBank’s procurement change. SoftBank released its results in Tokyo on Tuesday.

Silver Bands 7, the unit behind the charge, is funded by SoftBank and Vision Fund 2. It had reserved manufacturing capacity and bought generators and other equipment for U.S. data centers.

What changed in SoftBank’s procurement?

SoftBank said Silver Bands 7 “revised its equipment procurement strategy given the evolving requirements of its existing and planned projects.” By Sept. 30, the unit had paid ¥1,500.9 billion ($9.48 billion) for procurement.

The ¥597.2 billion loss comprises ¥457.0 billion in non-refundable advance payments and ¥140.2 billion in contract changes and settlements. SoftBank named neither suppliers nor affected orders, leaving the commercial reason for each revision undisclosed.

SoftBank can claim up to $2.1 billion in rebates on future equipment purchases over 10 years, subject to conditions. It booked no asset because the amount remained uncertain, while about $6.6 billion of advance payments stay on its balance sheet; SoftBank expects to recover them through project financing. The net effect is changed procurement terms, not a reduction in Ohio power demand.

Is the Ohio project being scaled back?

Chief Financial Officer Yoshimitsu Goto said SoftBank rushed to secure equipment but has no plan to scale back the Ohio project. He described a “thorough reassessment” of how the company buys equipment, according to TIKR, and said the contract remains under revision.

SoftBank’s SB Energy unit is building a 9.2 GW natural gas plant to power PORTS-Pike. In May, the group said it had reserved turbines from manufacturers including GE Vernova.

PORTS-Pike is planned at 8 GW of IT capacity. SoftBank signed a 20-year lease for the entire site with OpenAI in August. Ohio’s announced power and data-center capacity remains intact, although its equipment contract is unsettled.

How much does the Ohio reservation matter to GE Vernova?

GE Vernova told CNBC that SoftBank’s disclosure has “no negative or positive financial impact” on the company. It called SoftBank a valued customer, declined to discuss individual customers, and treats deposits on orders and slot reservations as non-refundable.

The company expects nearly all gas-turbine slots through 2030 to be sold by the end of 2026, and it has already sold slots for delivery in 2032. The 2030 sell-through target remains a company forecast, while the 2032 delivery slots represent sales already booked.

At the end of September, the end of the third quarter, GE Vernova reported 122 GW of gas power equipment backlog and slot-reservation agreements, up from 116 GW in the second quarter. It expects at least 130 GW by year-end, another forward target rather than booked orders.

Firm equipment backlog rose to 64 GW from 53 GW, while slot reservations fell to 58 GW from 63 GW as 13 GW converted to firm orders. Even if every turbine reserved for the 9.2 GW Ohio plant came from GE Vernova, that volume would remain well below one-tenth of the 122 GW total.

JPMorgan called the SoftBank news negative but said delays or cancellations could let GE Vernova reassign the slots to customers waiting for turbines. GE Vernova’s exposure therefore sits in the broader order book, not one Ohio reservation.

Why did AI power stocks sell off?

Elon Musk wrote on X on Nov. 6 that SoftBank was defaulting on turbine orders, without naming a supplier or offering evidence. SoftBank called the claim “simply not correct at all” and said no discussions had occurred about reducing the Ohio project.

GE Vernova, Vertiv and Bloom Energy each lost between 10% and 24% over the past week, the Motley Fool reported, as investors weighed inflation, interest rates and financing for AI data centers. MLQ.ai reported that lenders have pulled back from AI debt.

On Tuesday, Bloom Energy and Vertiv fell about 3%, while nuclear developers Oklo and NuScale Power dropped about 4%, according to TIKR. The move therefore extended a sector-wide financing sell-off rather than reflecting only SoftBank’s equipment charge.

SoftBank, Grab and PETROS committed $1.85 billion of seed capital to AI data centers in Malaysia on Monday. The sector sell-off reflects financing concerns, not a confirmed retreat from announced AI power demand.

The next test is whether SoftBank converts its revised Ohio equipment contract into a firm order before GE Vernova reaches its target of selling nearly all gas-turbine slots through 2030 by the end of 2026. GE Vernova’s order conversion, SoftBank’s final turbine choices and project financing will determine whether this becomes a delayed order or a lost sale.