SoftBank's $3B turbine bet backfires badly
Original: SoftBank’s billion-dollar loss may have put a cap on AI’s natural gas ambitions
Why This Matters
Signals that AI's natural gas power gold rush may be hitting a reality check.
SoftBank posted a $7.1B quarterly loss, with over half tied to nonrefundable deposits on 13+ GW of natural gas turbines it over-ordered for AI data center power. The write-down signals AI's gas ambitions may be cooling.
SoftBank's SB Energy subsidiary had placed nonrefundable deposits on more than 13 gigawatts of natural gas turbines — roughly 50% more than it needed — to secure supply amid surging AI power demand. Turbine order queues now stretch into the early 2030s, so the logic was sound: lock in capacity before rivals could. But data center operators appear to be rethinking their reliance on natural gas, leaving SoftBank holding excess orders it can't use or offload.
The result: a $7.1 billion quarterly loss announced Tuesday, with over $3 billion tied directly to those stranded deposits. Peter Gardett, CEO of Noreva, told TechCrunch that SB Energy had little choice but to overbook given market conditions. "This charge is just that price discovery finally happening," he said.
Meanwhile, analysts are pointing data center operators back toward the grid. Brent Nelson of Ascend Analytics told TechCrunch's Equity podcast that most facilities would be better served by a modest grid connection supplemented by large battery storage to manage peak loads — a cheaper and more flexible approach than dedicated gas generation. Natural gas carries its own risks, including winter supply curtailments when demand spikes. SoftBank's $33 billion, 9.2-GW gas plant announcement from February now looks premature.