SoftBank Books $7.1 Billion Loss as Its AI Gas-Turbine Bet Unravels

SoftBank posted a $7.1 billion quarterly loss on Tuesday, with more than half of it tied to power-generating equipment the company now considers largely worthless. The write-down marks the collapse of one of the largest procurement bets placed on natural gas for AI data centers.

The Japanese investment firm had committed to gas at extraordinary scale. Its SB Energy subsidiary announced in February that it would spend $33 billion on a 9.2-gigawatt natural gas power plant. That followed a $30 billion investment in OpenAI in early 2025.

Why did SoftBank over-order turbines?

Starting roughly two years ago, SoftBank placed deposits on more than 13 gigawatts of turbines, according to reports. That volume was almost 50 percent more than the company actually needed.

The over-ordering served a purpose. Turbine order queues now extend into the early 2030s, and deposits secured both hardware and project speed.

"SB Energy did not have a choice except to overbook turbines in the future if they wanted some turbines right away," Peter Gardett, CEO of Noreva, told TechCrunch by email.

The deposits were nonrefundable. When SoftBank reassessed the market, it judged much of that committed capital worthless.

How large was the misplaced bet?

The gas-related losses exceeded $3 billion. Gardett characterized the charge as expensive price discovery: SoftBank overpaid and over-ordered rather than risk overpaying and still falling short of turbines.

"This charge is just that price discovery finally happening," Gardett said.

CEO Masayoshi Son's original thesis was that AI's data center buildout would force power buyers through SoftBank's door. AI-driven electricity demand surprised the energy sector in both speed and magnitude, and gas positioned itself as the default answer for hyperscalers facing years-long grid interconnection delays.

Is natural gas still the safe choice for data centers?

Operators are recalculating. As AI data centers accumulate operating hours, their operators better understand actual power requirements, and gas carries risks of its own.

"Natural gas might seem like a safe bet, but there are still risks, including winter curtailments when supplies dip and demand spikes," Brent Nelson, senior managing director of markets and strategy at Ascend Analytics, told the Equity podcast on Wednesday.

Nelson argued the grid remains the better option for most facilities. Data centers would be best served by a grid connection, he said, albeit a smaller one than they might normally request, with large batteries covering the shortfall. Batteries are a cost-effective way to shave peak loads or ride out utility curtailment requests.

Data center operators may be reaching the same conclusion. That shift helps explain why the natural gas market is developing more slowly than SoftBank anticipated when it locked in its deposits.

Will the loss trigger cancellations?

Analysts see no domino effect. AI's aggregate power demand remains too large to drive mass cancellations of gas power plants, and natural gas retains its position as a proven, familiar energy source for the sector.

The lesson is narrower. SoftBank's losses suggest a ceiling on how far a single investor can corner the AI electricity market through sheer capital deployment. For now, gas keeps its momentum — but the $3 billion charge stands as the costliest price discovery yet in the AI power race.