SoftBank Denies Elon Musk’s Default Claim as AI Data Center Loss Hits $3.73 Billion
SoftBank Group has pushed back against Elon Musk’s claim that the company defaulted after placing orders for turbines, insisting that its artificial intelligence infrastructure strategy remains on course. The response comes as investor attention intensifies around the enormous energy demands tied to AI data centers in the United States.
The dispute began after Musk, the CEO of SpaceX and Tesla, posted on X that SoftBank had defaulted following turbine orders. SoftBank rejected that statement, making clear that it does not consider the claim accurate and that its broader AI infrastructure ambitions have not been derailed.
At the same time, SoftBank disclosed a major financial hit tied to its data center power strategy. The company recorded a JPY597.2 billion loss, equal to about US$3.73 billion, in the second quarter of fiscal 2026. The quarter covered the July to September 2026 period.
According to SoftBank, the loss followed a review of purchases related to power-generation equipment for data centers in the United States. These purchases appear to be part of the company’s effort to secure enough energy capacity for large-scale AI computing operations, where electricity availability has become one of the biggest challenges facing the industry.
AI data centers require enormous amounts of power to run advanced chips, cooling systems, networking hardware, and storage infrastructure. As demand for generative AI and cloud-based AI services grows, companies are racing to secure not only land and computing equipment, but also reliable energy sources. Turbines and other power-generation assets have become increasingly important in this race.
SoftBank emphasized that the loss is not connected to Project Stargate Ohio. That distinction is important because Project Stargate has been closely watched as part of the company’s broader push into AI infrastructure and next-generation computing capacity. By separating the loss from the Ohio project, SoftBank appears to be reassuring investors that one of its key AI initiatives remains intact.
The situation highlights the financial risks involved in building AI infrastructure at massive scale. While AI is seen as one of the most important growth opportunities in the technology sector, the cost of supporting it continues to rise. Data centers need advanced hardware, extensive real estate, high-capacity power systems, and long-term energy planning. Any adjustment in purchasing strategy or equipment valuation can lead to significant accounting impacts.
SoftBank has become one of the most aggressive global investors in AI, semiconductors, robotics, and digital infrastructure. Its latest financial disclosure shows that the company is still willing to absorb short-term losses as it positions itself for long-term opportunities in artificial intelligence. However, the size of the quarterly loss also underlines how expensive the AI infrastructure race has become.
For investors and industry watchers, the key question is whether SoftBank’s AI data center investments will generate enough future value to justify the upfront costs. The company’s denial of Musk’s default claim may ease concerns about its commitments, but the multibillion-dollar loss shows that execution risks remain significant.
SoftBank’s message is clear: it rejects the claim that it defaulted on turbine orders, says its AI infrastructure plans are still moving forward, and maintains that the newly recorded loss is separate from Project Stargate Ohio. As the AI boom accelerates, the company’s ability to manage power supply, capital spending, and data center expansion will remain under close scrutiny.
