Softbank loses $3.7 billion on canceled AI data center gas turbine orders days after denying Elon Musk’s claim it was defaulting
SoftBank might not have defaulted on a raft of gas turbine orders, but it has pulled out of deals for unwanted power units after overestimating how many it could use amid the AI data center buildout boom.
SoftBank, a Japanese tech investment company, suffered a $3.7 billion loss due to the cancellation of orders for gas turbines intended for AI data centers. The company had reserved over 13 gigawatts of power-producing turbines, equivalent to more than six Hoover Dams' worth of capacity. SoftBank CEO Masayoshi Son believed these turbines would be vital to the company's earning potential.
The turbines were to power a 9.2-gigawatt data center in Ohio, scheduled for construction in early 2027, which would be leased to OpenAI after Nvidia guaranteed $250 billion in financing. However, SoftBank has now canceled its remaining reservations with its turbine supplier, GE Vernova, and unwound contracts for orders that were too far gone.
SoftBank CFO Yoshimitsu Goto clarified that this was a voluntary move, contrary to claims by xAI CEO Elon Musk on his X social network.
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