Musk Turbine Claim Hits SoftBank, AI Projects

Natural gas power turbine in a plant hall, tying turbine order dispute to 9984.T and AI data center power needs

Key Points

01Elon Musk alleges SoftBank (9984.T) is defaulting on turbine orders with no evidence provided so far
02SoftBank (9984.T) shares fell about 10.8% and its debt insurance costs rose to 466 bps
03Loans tied to a Stargate New Mexico data center, including a $25 million slice, are being sold at a discount
04SoftBank (9984.T)’s Ohio AI data-center plan needs 9.2 GW of gas power with turbines reserved from makers including GE Vernova

Musk’s Default Claim Sparks New Scrutiny

Elon Musk intensified pressure on SoftBank on 6 November 2026, writing that “SoftBank is defaulting on their turbine orders.” The comment, posted on X, did not identify any supplier, order or amount, and Musk has not offered evidence to substantiate the allegation. SoftBank had not responded publicly.

The claim landed during a sharp market downturn for AI infrastructure names. SoftBank Group shares fell 10.8% in Tokyo.

Stargate Projects and Turbine Needs

SoftBank is a principal backer of the Stargate AI data-center program. One flagship element is a planned complex in Ohio described as one of the world’s largest AI data-center developments, requiring 9.2 gigawatts of gas-fired electricity generation. SoftBank confirmed in May that it had reserved gas turbines from manufacturers including GE Vernova to supply this power.

The Ohio capacity is meant to serve data centers leased by OpenAI, with the first facilities scheduled to start operating in 2028. An SB Energy filing notes that delays in securing power could push back openings, reducing rental income and potentially triggering financial penalties for the developer. With gas turbine lead times reaching up to seven years, any loss of reserved units could jeopardize the timetable for bringing the Ohio data centers online in 2028.

Financing Strain Around New Mexico Campus

Musk’s remark followed an anonymous seller reportedly trying to offload about $500 million of data-center loans, including a $25 million slice tied to a Stargate campus in New Mexico backed by SoftBank, OpenAI and Oracle.

SoftBank, as main sponsor of Stargate and parent of SB Energy, is described by Musk as “defaulting on their turbine orders.” If that description were borne out, it would mark a first public indication of project sponsors stepping back from long‑lead power equipment, which has been a bottleneck for data‑center expansion since 2024.

Market and Credit Reaction

The turbulence around Stargate coincided with a sharp pullback in AI-related equities. The Philadelphia Semiconductor Index fell 12.25%, its worst single day since March 2020, while the S&P 500 dropped more than 4% and the Nasdaq more than 6%, entering a correction. Memory-chip companies were hit hardest on worries that permitting issues and funding gaps could delay 2028 data-center capacity.

SoftBank’s credit risk also climbed. The cost of insuring its debt reached 466 basis points, the highest level since October 2022, as investors assessed the company’s sizable AI spending commitments. SoftBank’s dollar bonds fell, and the group has invested $64.6 billion in OpenAI and is considering adding less than $1 billion more, leaving it heavily exposed to the performance and timing of AI infrastructure projects.

Key Takeaways

01Musk’s unsupported turbine-default claim has become a focal point for existing concerns about SoftBank’s role in large AI power projects.
02SoftBank’s Stargate commitments, including the 9.2 GW Ohio buildout, depend on long‑lead gas turbines whose loss could delay 2028 data‑center capacity.
03Financing pressures around the New Mexico campus, including discounted loan sales and Oracle (ORCL)’s force majeure notice, underline execution risk in the Stargate program.
04The episode coincides with a sharp selloff in AI chips and higher SoftBank credit costs, linking project-level doubts to wider AI infrastructure and funding sentiment.

References