Generators bought ahead for AI weigh on SoftBank Group with a loss of about ¥600 billion

[Update, November 11, 2026, 4:39] Where we earlier said the size of the power equipment loss "needs to be confirmed," we have added the figure of ¥597.2 billion given in news reports.

SoftBank Group (SBG) paid in advance to lock in generators and other power equipment to run AI data centers. For the first time, that kind of advance purchase has shown up as a large loss. SBG reportedly lost about ¥600 billion on the equipment, and its net result for the July–September quarter was reportedly a loss of ¥1.1153 trillion. At ¥158 to the dollar, that comes to about $7 billion. For roughly two years, the rule has been that whoever grabs AI power first wins. SBG's results showed markets that this could go into reverse. The worry reportedly spread to US generator maker GE Vernova, whose shares fell.

For Japanese companies: Sales and legal staff at manufacturers and trading houses that supply gas turbine parts, transformers or power distribution equipment to US data centers should check with their customers this month on cancellation terms for orders they have taken and on how advance payments will be handled. Accounting staff at companies that hold SBG bonds or related financial products should check whether those holdings will need to be revalued in their next results. Most other companies are not directly affected.

What has been reported

According to US reports (mlq.ai, Quartz), SBG went from a profit in the previous quarter to a loss of about $7 billion in July–September. The reports give two reasons.

The first is a write-down of power equipment bought for AI data centers in the United States. SBG recognized that the book value of the equipment had fallen well below what it paid (a write-down or impairment), and the amount is put at about ¥600 billion. That one item works out to roughly half of the quarter's loss.

The second is reportedly a loss on hedges SBG had placed against a fall in Intel's share price. Still, the headlines name the power equipment first. In the results of a company best known for its AI investments, the main story was neither chips nor models but generators.

Why power secured in advance became a loss

The common view has been that AI data centers run short of electricity before they run short of buildings or chips. Getting connected to the grid can take years, so companies set out to install gas turbines and other generators of their own. But generator factories are booked up years ahead. That led more and more buyers to put down deposits and reserve production slots before their projects were final. SBG appears to have been part of that trend.

The approach assumes the data centers get built on schedule. If projects are delayed or scaled back, the reserved equipment becomes inventory with no use. Reselling it is hard if other buyers are in the same position, because no one will pay for it. The latest loss is the first time this assumption breaking down has turned into a dollar figure in the results of a large, well-known company.

A separate story has also surfaced around the results. According to The Deep Dive, Elon Musk claimed in effect that SBG had failed to honor its commitments in a turbine deal, and SBG reportedly denied the claim. This suggests relations among large buyers have soured over generator production slots.

The risk of the power scramble going into reverse

The fallout did not stop at SBG. Investing.com reported that shares of gas turbine maker GE Vernova fell. GE Vernova is one of the companies that has gained most from demand for generators at AI data centers. If large buyers start writing off equipment they reserved and letting it go, the current order backlog may not all turn into revenue. That appears to be how the market read it.

The race for data center power is still going. The FT has reported that Anthropic will take on 1.7GW of gas generators, though this has not yet been confirmed. If so, the same kind of equipment is being bought up by one company while another takes a loss on it and rethinks its plans, at the same time. Which side made the right call will depend on how many data centers actually get built.

What has not been confirmed

This article is based on news reports. We have not been able to check SBG's earnings materials directly. The following points need to be checked against them: the accounting line item for the power equipment loss (reported as ¥597.2 billion); whether it covers gas turbines only or also transformers and other equipment; which projects the equipment was for; the size of the loss on the Intel hedges; what exactly Musk claimed and how SBG worded its denial; and how far GE Vernova's shares fell. Figures sometimes differ between reports and may be corrected in later materials.

What to watch next

Figures due this week and next will show how far the power scramble is unwinding. Results from AI cloud providers CoreWeave (after the close on November 10) and Nebius (November 12), and from NVIDIA (November 17), will offer clues on whether data center projects are slipping and whether capital spending is being cut. In SBG's case, the market already prices its credit default swaps (CDS), the cost of insuring against a default, at elevated levels. With the power equipment loss now added, the terms of SBG's next fundraising are also worth watching.