SoftBank reserved enough gas turbines to match six Hoover Dams, then took a $3.7 billion hit, mostly from canceled reservations, the Wall Street Journal reports.
SoftBank reserved more than 13 gigawatts of gas turbines to power AI, then took a $3.7 billion earnings hit, mostly from canceled reservations. That is according to a Wall Street Journal report citing sources. The report says the power reserved equals about six Hoover Dams.
A gas turbine is an engine that burns gas to make electricity. A gigawatt is a unit of power. By the report's math, 13 gigawatts is roughly what six Hoover Dams produce. SoftBank booked that much capacity to feed the AI boom. Then many of those reservations were canceled, and the company paid for it.
AI tools run in large data centers that use huge amounts of electricity. Companies are racing to secure power before rivals do. This story shows the risk of that race. Guess wrong about future demand, and the bill can run to billions of dollars.
The material available does not say why the reservations were canceled. It does not say how much of the $3.7 billion came from cancellations versus other costs, only that most of it did. It also does not say what SoftBank plans to do with the turbines it still holds, or whether prices for AI products will change as a result.
Powering AI is a costly bet, and SoftBank's $3.7 billion hit shows that guessing wrong on electricity demand can hurt.
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