SoftBank’s billion-dollar loss may have put a cap on AI's natural gas ambitions
SoftBank lost over $3 billion preordering natural gas turbines to power AI data centers. Here's what the loss means to power markets.
TL;DR
- SoftBank invested heavily in natural gas turbines for AI data centers, over-ordering by nearly 50% of its needs.
- The company placed substantial nonrefundable deposits, totaling billions of dollars, to secure turbine orders.
- SoftBank announced a $7.1 billion quarterly loss, with a significant portion stemming from losses on power-generating equipment.
- The over-ordering was an attempt to secure supply amidst rapidly growing AI power demands and long turbine waitlists.
- Industry experts suggest that grid connections, supplemented by large batteries, may be a more cost-effective and reliable solution for data centers than natural gas.
- While AI's power demand remains high, SoftBank's loss may signal a limit to the unchecked growth of natural gas as its primary power source.