SoftBank is taking a $3.7 billion hit to its earnings after canceling its remaining gas turbine reservations with GE Vernova and unwinding contracts for orders that were too far along to simply drop.
The turbines were meant to power AI data centers. According to people familiar with the orders, SoftBank had reserved more than 13 gigawatts of turbine capacity, a gigawatt being a billion watts. That is more than six Hoover Dams' worth, and by early 2026 it was more generation capacity than the entire state of Connecticut. Founder Masayoshi Son had seen the hardware as vital to the company's earning potential. SoftBank told investors on an earnings call that it placed the orders "to secure power generation equipment in anticipation of shortages." It had first planned to use the turbines for future gas-powered plants, then changed direction.
SoftBank also rejected a claim by xAI CEO Elon Musk, who said on X that the company was defaulting. Chief Financial Officer Yoshimitsu Goto said, "This is simply not correct at all. There is no such default." The company says the cancellations were voluntary.
The bet made sense on its face. Turbines must be ordered years ahead, and buyers who lock in supply early can look smart if shortages hit. The cost is that manufacturers typically charge tens of millions of dollars per gigawatt for reservations. Hardware scrambles of this kind, where buyers hoard scarce parts against expected demand, tend to hurt most when demand arrives later or smaller than planned.
The numbers invite a closer look. Spread across all 13 gigawatts, $3.7 billion works out to roughly $285 million per gigawatt, several times the typical reservation fee. Only part of the capacity is affected, so the gap is wider still. That is our inference, not something SoftBank has said, but it suggests the charge covers more than forfeited deposits, probably including the cost of unwinding contracts already underway.
Separately, SoftBank is set to build a 9.2-gigawatt, $33 billion power plant in Ohio, with construction scheduled for early 2027. It would feed an eight-gigawatt data center leased to OpenAI, after Nvidia entered talks about guaranteeing around $250 billion of financing. Whether a company that overbought turbines can size that project more accurately is the question to watch.