SoftBank's $3 billion loss may limit AI's natural gas power plans

SoftBank made a significant financial misstep by placing deposits on more than 13 gigawatts of natural gas turbines, nearly 50% more than needed for its AI data centers, according to TechCrunch.

The over-ordering was intended to secure turbines quickly amid long queues extending into the early 2030s, as the energy sector struggled to meet the rapid rise in AI power demands.

SoftBank's strategy aimed to dominate the market by leveraging its substantial investments, including a $33 billion plan for a 9.2-gigawatt natural gas power plant and a $30 billion investment in OpenAI.

However, the company announced a $7.1 billion quarterly loss, with over half attributed to power-generating equipment, reflecting the nonrefundable deposits on turbines now considered largely worthless.

Experts cited this loss as a form of price discovery in a market where overpaying and over-ordering was seen as the only way to secure necessary equipment amid high demand.

This financial setback may constrain SoftBank's ambitions to power AI data centers with natural gas, signaling a potential cap on such energy strategies in the AI sector.