Musk Says SoftBank Is Defaulting on Turbine Orders as Its Default Insurance Hits a 4-Year High

Elon Musk says SoftBank is defaulting on its turbine orders. He posted the claim Friday, per BeInCrypto, and it landed right as the cost of insuring against a SoftBank default climbed to a four-year high. Neither SoftBank nor any turbine manufacturer has backed the claim up.

Musk didn't name a source, a supplier, or even the kind of turbines he meant. He also stopped short of saying SoftBank is defaulting on its bonds. The post came as a reply to a former aide who argued Musk's early skepticism about Stargate had aged well. Back in January 2025, OpenAI unveiled the AI infrastructure venture with SoftBank and Oracle, promising up to $500 billion in investment. Musk's take then: the backers didn't have the money, and SoftBank had well under $10 billion secured.

The aide paired those old posts with fresh news from a data center loan auction. An anonymous seller is shopping roughly $500 million of such loans, including financing tied to a Stargate site in New Mexico. Oracle, the site's main tenant, sent its developer a force majeure notice in September — a legal move that can pause obligations when events spiral beyond a company's control. Oracle insists the project is still on schedule.

Why the turbine talk bites: data center builders increasingly lean on gas turbines for on-site power, and those machines are already scarce. SoftBank's five-year credit default swap — the contract that pays out if a borrower defaults — jumped by 22 basis points, landing at 466 on Friday. That's the widest since October 2022, according to Reuters.

Investors keep asking how SoftBank funds its $64.6 billion OpenAI investment. The group borrowed at record yields, while OpenAI pushed its listing out to 2027. Then Democratic midterm wins stoked fears that states could slow data center construction, and Wall Street shed $2 trillion on Thursday. The pain rolled into Asia, where SoftBank shares closed down more than 10% in Tokyo and have now lost over 40% across six months.

Musk's claim, if it holds, moves the pressure from lenders to the builders waiting on power equipment — and that risk already has a price tag. Data center delay penalties can run up to $5 million a day, and SoftBank's SB Energy sits among the builders exposed.