SoftBank’s billion-dollar loss may have put a cap on AI’s natural gas ambitions

Summary

• SoftBank invested $30 billion in OpenAI in early 2025 & announced a $33 billion plan for a 9.2-gigawatt natural gas power plant via its SB Energy subsidiary.
• Approximately two years ago, SoftBank placed deposits on over 13 gigawatts of turbines, a volume nearly 50% higher than its immediate needs.
• Peter Gardett, CEO of Noreva, stated that overbooking turbines was necessary to secure immediate delivery amidst queues extending into the early 2030s.
• SoftBank reported a $7.1 billion quarterly loss, with over half attributed to losses on power-generating equipment & nonrefundable deposits.
• Gardett described the financial charge as a $3 billion price discovery result of overpaying & over-ordering to avoid future shortages.
• Many data center operators are turning to natural gas for energy security due to years-long grid connection waits.
• Brent Nelson of Ascend Analytics noted risks in natural gas supply, including winter curtailments, & suggested grid connections paired with large batteries as a cost-effective alternative.
• Data center operators may be shifting toward grid reliance, causing the natural gas market to develop slower than SoftBank anticipated.
• SoftBank's losses are unlikely to trigger mass cancellations of gas power plants given the large scale of AI power demand.