SoftBank’s energy strategy began with a wager on scarcity. About two years ago, the company reportedly placed deposits on more than 13 gigawatts of turbines—nearly 50% more than it needed—to secure equipment as waits stretched into the early 2030s. In February, its SB Energy subsidiary announced plans to spend $33 billion on a 9.2-gigawatt natural-gas power plant.¹

The bet was meant to put SoftBank in a position to serve AI data centers struggling to obtain electricity. But turbine deposits were nonrefundable, and much of the equipment was later considered worthless. “This charge is just that price discovery finally happening,” said Peter Gardett, CEO of Noreva, describing the cost of over-ordering.¹ The losses tied to power-generating equipment accounted for more than half of SoftBank’s quarterly hit, according to the report.¹

On Tuesday, SoftBank reported a 1.1 trillion-yen loss—about $7 billion—for the three months through September, reversing a 2.5 trillion-yen profit a year earlier. Sales, however, rose 16% to 2.2 trillion yen.² Another report highlighted a writedown on a U.S. data-center project as part of the slump.³

The setback does not mean the AI power boom is over. But it has sharpened questions about which energy sources will meet data centers’ needs. Brent Nelson of Ascend Analytics warned that natural gas carries risks, including winter supply curtailments, and argued that a smaller grid connection paired with large batteries may be a better fit for many operators.¹ SoftBank’s losses, the report said, are unlikely to trigger a wave of gas-plant cancellations; for now, demand remains strong, even if the company’s bet has found a limit.¹