EXPLAINED | SoftBank’s $3.7 Billion AI Power Hit. Who Pays When Data Centre Plans Change?

What happened?

On 10 November, Japanese investment group SoftBank reported a loss of about $7 billion attributable to its shareholders for the July–September quarter. One of the biggest hits came from equipment meant to generate electricity for US artificial intelligence data centres. SoftBank put the cost of changing those procurement plans at $3.73 billion. Higher financing costs and investment losses also weighed on its quarterly results.

Its subsidiary Silver Bands 7 had been securing power equipment for several projects, including the PORTS-Pike Technology Campus in Ohio. The group disclosed the equipment charge across those arrangements. It gave no breakdown by site.

Why order power equipment so far in advance?

A data centre needs electricity to run its servers and cool them. In places where a large new connection to the grid can take years, some developers plan to generate power on or near the site. That puts them in another queue, this time for machinery such as gas turbines. A developer can reserve time on a factory’s production schedule before it is ready to place a firm order. That gives it a better shot at getting equipment when the project needs it.

At the end of September, US equipment maker GE Vernova reported 64 gigawatts of gas-power equipment in its order backlog and another 58 gigawatts covered by slot reservations. The two figures measure the generating capacity of the equipment involved. The split gives a sense of how much factory time customers were already setting aside for possible orders.

What did SoftBank pay for?

Silver Bands 7 signed agreements to reserve manufacturing capacity and buy power-generation equipment. Its cumulative payments under these and related arrangements reached $9.48 billion by 30 September, counting payments that began in the previous financial year. SoftBank says the needs of its existing and planned projects changed, so the subsidiary revised what it would buy. The filing gives no item-by-item list of the equipment affected.

Who pays when those plans change?

In this case, SoftBank recorded the cost. Of the $3.73 billion hit, $2.85 billion came from non-refundable advances for factory capacity and equipment. Another $880 million came from changing or settling contracts. The first figure reflects money paid earlier. The second reflects obligations arising from the contract changes and settlements. The date the group records the charge and the dates cash leaves its accounts can therefore differ.

For another buyer and supplier, the contract can produce a different result. A deposit might be credited against a later order, forfeited if the buyer walks away, or governed by a separate cancellation schedule. The terms determine who bears the cost of reserving a factory slot that goes unused.

Can SoftBank get any of the money back?

Its subsidiary can qualify for up to $2.1 billion in rebates on future equipment purchases over ten years. Think of a discount on a future order. Silver Bands 7 would have to buy qualifying equipment and meet the agreed conditions. SoftBank said it could not determine the amount as of 30 September and therefore did not list the rebate rights as an asset on its balance sheet.

Is the Ohio data centre still going ahead?

The filing describes a change in equipment plans across US projects, including Ohio. Pike County’s October update still described a phased development led by SoftBank’s SB Energy, with OpenAI as its main tenant. The plans include natural gas generation and new transmission lines. The county said it was still negotiating a local agreement and expected capacity to come online in phases beginning in 2028. That remains a project timetable, subject to approvals and agreements.

Where do Indian manufacturers come in?

Bengaluru-based TD Power Systems disclosed a $9.28 million order from a US equipment maker in July 2024. It said the generators would be used in several applications, including power and backup for US AI server farms. In October 2026, it disclosed a separate ₹192 crore US order for generators used with gas turbines, with deliveries scheduled from August 2027 to January 2028. The October filing gave no end customer or data centre site. These orders show how Indian suppliers can participate in the US power build-out. Neither filing names SoftBank.

Which numbers will tell us if SoftBank’s revised plan is working?

The first is how much equipment SoftBank actually takes delivery of and puts to work. The second is how much of the $2.1 billion in potential rebates it earns on orders it needs. In Ohio, the next public milestones are the local agreement and the permits and schedules for the first phase. Those will show how the revised equipment plans line up with the power the campus needs to start operating.