Softbank's financial setback highlights limits to ai's natural gas power push

SoftBank's recent announcement of a $7.1 billion quarterly loss, with over half linked to power-generating equipment, suggests a potential ceiling on its aggressive investment in AI-related energy infrastructure. The investor had made substantial commitments, including deposits on over 13 gigawatts of turbines, which reportedly exceeded its immediate needs by nearly 50%. This over-ordering was partly a strategic move to secure supply, as Peter Gardett, CEO of Noreva, noted that SB Energy had no alternative but to overbook to obtain turbines quickly. However, the resulting losses, amounting to over $3 billion, are described by Gardett as the cost of price discovery. While SoftBank's losses are not expected to trigger widespread cancellations of gas power plants due to the sheer scale of AI demand, industry experts suggest a shift in strategy. Brent Nelson, senior managing director of markets and strategy at Ascend Analytics, indicated that while natural gas is a current favored source, grid connections, supplemented by large batteries, might prove a more stable long-term solution for data centers.