SoftBank Group has recorded a $3.7 billion loss related to excess natural gas turbine orders for artificial intelligence data center projects, contributing to a quarterly net loss of approximately $7.1 billion. The Japanese investment firm reportedly reserved over 13 gigawatts of turbine capacity, nearly 50% above its estimated requirements, before revising its procurement plans.
According to SoftBank’s November 10 earnings announcement, the company recognized losses from nonrefundable advance payments and modifications to equipment contracts. The adjustment follows substantial investments in power generation infrastructure intended to support the electricity requirements of AI data centers.
SoftBank Reserved More Turbines Than Required
SoftBank began securing turbine reservations approximately two years ago as demand for power generation equipment increased alongside AI infrastructure development. The Wall Street Journal reported that the company committed to over 13 gigawatts of capacity, exceeding the requirements of its planned projects.
The reservations included equipment intended for SB Energy’s proposed $33 billion, 9.2-gigawatt natural gas power plant announced in February 2026. SoftBank had also committed approximately $30 billion to OpenAI in early 2025 as part of its investments in artificial intelligence.
Peter Gardett, CEO of energy intelligence company Noreva, told TechCrunch that overbooking was effectively necessary for developers seeking earlier turbine deliveries. Manufacturing backlogs have extended delivery schedules into the early 2030s, complicating procurement for large power projects.
Equipment Cancellations Lead to Billions in Losses
SoftBank recorded approximately $2.9 billion in losses on nonrefundable advance payments, alongside another $880 million associated with contract modifications and settlements. The company had made approximately $9.5 billion in advance payments and expects to recover portions of the remaining balance through planned projects and future equipment purchases.
SoftBank also disclosed potential rebates of up to $2.1 billion on qualifying future purchases, subject to certain conditions. Its revised procurement strategy reflects changes to the equipment requirements of its U.S. AI infrastructure projects.
Alternative Power Strategies Gain Attention
Natural gas remains an option for AI data centers facing delays in obtaining electricity from existing power networks. However, Brent Nelson, senior managing director at Ascend Analytics, identified supply restrictions during winter demand peaks as a potential operational risk.
Nelson suggested that data center operators could combine smaller grid connections with large battery systems to manage peak electricity requirements. Batteries could also provide temporary support when utilities request reductions in electricity consumption.
SoftBank’s procurement losses come as infrastructure developers evaluate the costs and operational requirements of powering increasingly large AI facilities. The company has revised its turbine commitments while continuing to develop its planned U.S. power generation projects.
Featured image credits: Wikimedia Commons
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