Elon Musk claimed on Friday that SoftBank is defaulting on its turbine orders. The remark landed as the cost of insuring against a SoftBank default climbed to a four-year high.
Neither SoftBank nor any turbine maker has confirmed the claim. Still, the timing matters for the group’s bondholders and shareholders, who already carry the debt behind its OpenAI bet.
Why Is Musk Taking Aim at Stargate Again?
Musk replied to a former aide who suggested his early doubts about Stargate had proved right. OpenAI announced the AI infrastructure venture with SoftBank and Oracle in January 2025, promising up to $500 billion in investment.
Back then, Musk said the backers lacked the money and that SoftBank had well under $10 billion secured.
The former aide paired those posts with fresh news of a data center loan auction. A mystery seller is offering about $500 million of such loans, including financing for a Stargate site in New Mexico.
The seller remains anonymous. Oracle, the site’s main tenant, sent its developer a force majeure notice in September, a legal claim that events outside its control can delay its obligations. The company has said the project remains on schedule.
Musk did not name a source, a supplier, or the type of turbines he meant. He also did not say SoftBank is defaulting on its bonds.
Yet data center builders increasingly rely on gas turbines for on-site power, and those machines remain in short supply.
Credit Markets Price the Risk of SoftBank Defaulting
SoftBank’s five-year credit default swap (CDS), a contract that pays out if a borrower defaults, jumped 22 basis points to 466 on Friday. That is the widest level since October 2022, Reuters reported.
Investors have questioned how SoftBank funds its $64.6 billion OpenAI investment. The group borrowed at record yields, while OpenAI pushed its listing to 2027.
Meanwhile, Democratic midterm wins raised fears that states could slow data center construction. That worry drove the $2 trillion wipeout on Wall Street on Thursday.
The selloff then spread across Asia,where SoftBank shares closed down more than 10% in Tokyo. The stock has lost more than 40% over the past six months.
In contrast, Musk’s claim points to the physical supply chain rather than credit markets. If it holds, SoftBank defaulting on turbines would shift the strain from lenders to the builders waiting on power equipment.
That risk already has a price. Data center delay penalties can reach $5 million a day, and SoftBank’s SB Energy sits among the builders exposed.
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