True or false? Musk drops a bombshell: SoftBank's gas turbine order is in default

As the AI infrastructure wave sank into "midterm election anxiety" this week, a startling accusation from Musk once again pushed Masayoshi Son and SoftBank Group into the spotlight on Friday. On Friday, US Eastern Time, Tesla and SpaceX CEO Musk dropped a bombshell on social platform X: "SoftBank is in default on its gas turbine orders." Musk made the statement while replying to X user Katie Miller. Miller's post had shared media reports that ING was planning a one-off sale of a data center loan portfolio totaling about US$500 million. Tellingly, when Musk posted the explosive tweet, he did not present any internal documents or supplier statements to substantiate SoftBank's "default." As of publication, SoftBank had not publicly responded to the accusation, and the major gas turbine manufacturers involved also remained silent. But returning to industry fundamentals, SoftBank does currently hold an extremely massive computing expansion blueprint. Public information shows that SoftBank's planned ultra-large data center infrastructure in Ohio includes supporting new-build natural gas power generation capacity of up to 9.2 gigawatts (GW). As early as May this year, a spokesperson for SB Energy, SoftBank's clean energy subsidiary, said prominently that the company had locked in sufficient gas turbine capacity quotas from multiple major global suppliers, including GE Vernova. And Musk's accusation "opened fire" just as ING was reported on Friday to be selling a data center loan portfolio, which inevitably gives industry insiders plenty of "room for imagination"... The ING assets for sale include a US$25 million credit share whose underlying asset corresponds to a mega data center campus in New Mexico; the campus belongs to the "Stargate" project jointly advanced by OpenAI, SoftBank Group and Oracle. It was precisely at that site that Oracle had issued a notice to the developer invoking force majeure clauses. As of October this year, SoftBank's cumulative investment in OpenAI had reached US$64.6 billion. And as early as the beginning of 2025, when the US$500 billion Stargate supercomputing project was unveiled, Musk had publicly questioned the sustainability of its funding chain, drawing a long-distance rebuttal from OpenAI CEO Sam Altman. A Cailian Press review shows that among currently known official information, at least when GE Vernova released its third-quarter earnings in late October, it did not disclose that its customers were experiencing financing difficulties or defaults. At that time, an analyst asked GE Vernova CEO Scott Strazik: "I want to understand, with respect to the projects and customers in your gas turbine/turbine backlog, as well as the overall contract situation, are you seeing any business disruption or slowdown caused by financing difficulties? Or are there any requests to exit capacity/slot reservations?" Strazik replied, "No, we are not seeing that at all... The target customer base we serve all have very strong balance sheets and continue to work closely with us." Although the authenticity of Musk's disclosure is currently difficult to determine, at a sensitive moment when the AI sector is already reeling from regulatory and valuation adjustments, a market rattled like a bird startled by the mere twang of a bow quickly chose "risk avoidance first." SoftBank's five-year credit default swap (CDS) spread surged to 466 basis points on Friday, the highest on record since October 2022. Heavy buying by bond and credit derivatives traders reflects genuine market concerns about the debt-servicing risk and leverage exposure of this Japanese technology investment giant. In fact, the recent sharp swings among hyperscalers and neocloud providers have already sent a signal: investors are increasingly worried that Democratic regulatory pushes against data center expansion could evolve into a broader wave of project suspensions early next year. The biggest obstacle facing this round of AI infrastructure buildout in the US is coming from the local level: 41% of planned data center expansion projects are highly concentrated in states and local jurisdictions whose political map is tilting toward the Democratic Party. Rising permitting thresholds and the potential threat of construction moratoriums are putting the entire infrastructure cycle at risk, and a broader industry shakeout may already be close at hand. At the same time, several industry news items that emerged this weekfrom Microsoft gradually terminating some leases to some financial institutions beginning to seek transfers of data center credit assetsall reflect that market worries about an AI bubble and overbuilding are shifting from "smoldering" to "real fire." This article is reprinted from "Cailian Press," edited by GMTEight's Liu Jiayin.