SoftBank has a pattern: it may not be the earliest investor in a hot trend, but when it commits, it commits massively. Consider its $30 billion wager on OpenAI in early 2025, or its February announcement that SB Energy, its subsidiary, would spend $33 billion on a 9.2-gigawatt natural gas power plant. If you can't be first, be biggest, apparently. That same philosophy seems to have carried over into procurement, where orders were likewise supersized.

Roughly two years ago, SoftBank reportedly placed deposits on more than 13 gigawatts of turbines—almost 50% more than it actually needed. That decision to over-order undoubtedly helped the company secure turbines and accelerate its projects. The energy sector was caught off guard by how quickly and how massively AI's power demands surged. Turbine order queues now stretch into the early 2030s. With natural gas emerging as a go-to power source for the AI boom, CEO Masayoshi Son wagered that by deploying his investment firm's substantial war chest, he could corner a portion of the market. If the AI world wanted power for its data centers, it would have to come to him.

Now that bet appears to have fizzled. SoftBank announced a $7.1 billion quarterly loss on Tuesday, with more than half of that stemming from losses tied to power-generating equipment. The investor had paid turbine manufacturers nonrefundable deposits to secure orders, and it now considered much of those worthless. The move was also a costly bit of price discovery, Gardett said. Rather than overpay and potentially still come up short on turbines, SoftBank overpaid and over-ordered. "This charge is just that price discovery finally happening," Gardett said.

The magnitude of that misplaced bet—over $3 billion—reflects some of the electricity mania that has swept the AI world. Faced with years-long waits to connect to the grid, many hyperscalers and developers have turned to natural gas as a sort of energy security blanket—something proven and familiar. As AI data centers spend more time in operation, their operators are getting a better feel for what's required to keep them running. Natural gas might seem like a safe bet, but risks remain, including winter curtailments when supplies dip and demand spikes, Brent Nelson, senior managing director of markets and strategy at Ascend Analytics, told the Equity podcast Wednesday.

In light of that, Nelson said the grid might still be their best bet. Most data centers would be best served by a grid connection, albeit a smaller one than they might normally request. To make up for the shortfall, large batteries are a cost-effective choice, Nelson said. They'd help shave peak loads or ride out requests from the utility to curtail electricity use. Data center operators might be reaching that same conclusion, causing the natural gas market to develop more slowly than SoftBank anticipated.

SoftBank's natural gas-related losses are unlikely to trigger a domino effect leading to mass cancellations of gas power plants. AI's power demand appears too large for that. For now, natural gas is riding high—though SoftBank may have found its ceiling.