Japanese investor SoftBank reported a $3.7 billion charge on Tuesday after it cancelled a large number of orders for gas-producing equipment intended to power AI hardware that it could not use. The decision has heightened concerns that the AI-driven infrastructure buildout — financed in many cases by hyperscalers taking on substantial debt to support data centre expansion — may be losing momentum.
Market jitters and leadership change
Investor nerves were compounded by the resignation of Nvidia founder Jensen Huang, a development that has raised fears the world’s largest chipmaker could retreat from its strategy of supporting AI hardware under new leadership. As one fund manager told Reuters, “I think the fear is that the music might stop.”
Winners among suppliers: Siemens Energy
Despite the unease, some suppliers continue to benefit from the AI buildout. Siemens Energy expects to triple its dividend in 2027 as the US data centre boom increases demand for its gas turbines and grid equipment. The company’s CEO said that some of the growth rates assumed for data centres were unrealistic, but that few wanted to hear that assessment.
Supply constraints and shifting demand
Customers for gas turbines are facing multi-year waiting times, prompting developers to increasingly seek second-hand equipment. At the same time, Chinese gas-turbine manufacturers hope to capitalize on the high demand.
Why this matters
SoftBank’s cancelled orders and the uncertainty around key industry players highlight the fragility of the AI infrastructure expansion: investment and financing strategies are sensitive to decisions by leading companies and to the actual pace of demand. Nevertheless, certain suppliers still see strong near-term demand, particularly from US data centre construction.
