Elon Musk alleges SoftBank default on turbine orders amid rising CDS spreads
Musk’s claim that SoftBank is failing to deliver gas turbines for data centers coincides with a four‑year high in credit default swap pricing for the Japanese conglomerate.
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Key takeaways
- Musk said SoftBank is defaulting on turbine orders for data‑center projects, though no supplier or SoftBank confirmation exists.
- SoftBank’s five‑year CDS spread rose 22 basis points to 466, the widest level since October 2022.
- SoftBank shares fell more than 10% in Tokyo after the claim, extending a six‑month decline of over 40%.
Elon Musk took to social media on Friday to allege that SoftBank Group is defaulting on orders for gas turbines needed to power data‑center facilities. The comment arrived as the cost of insuring against a SoftBank default hit a four‑year high, prompting market participants to reassess the conglomerate’s credit risk.
Musk’s allegation and its context
Musk did not specify which turbine supplier or the exact type of equipment involved, nor did he claim SoftBank is missing bond payments. His remarks referenced a broader dispute over the Stargate AI‑infrastructure venture that SoftBank co‑invested in with OpenAI and Oracle in early 2025. At the time, Musk warned that SoftBank’s capital commitments were insufficient, noting the firm had “well under $10 billion secured.”
Credit market reaction
According to Reuters, SoftBank’s five‑year credit default swap (CDS) spread widened by 22 basis points to 466 on Friday, the widest level recorded since October 2022. The rise reflects heightened concerns about the group’s ability to fund its $64.6 billion OpenAI investment, which was financed at record yields and has been delayed to a 2027 listing.
Equity impact and broader market fallout
SoftBank’s shares slumped more than 10% on the Tokyo exchange following Musk’s tweet, extending a six‑month decline that has erased over 40% of the stock’s value. The sell‑off coincided with a broader market correction after U.S. midterm election results raised fears of tighter state regulations on data‑center construction, contributing to a $2 trillion drop on Wall Street and a spill‑over to Asian markets.
What to watch next
Investors will monitor whether SoftBank or any turbine manufacturer provides a formal response to Musk’s claim, and whether the CDS spread stabilises or widens further. Additional scrutiny is likely on the financing of the Stargate data‑center project, especially after Oracle issued a force‑majeure notice in September. Finally, any regulatory developments affecting data‑center permits could add further pressure to SoftBank’s balance sheet.
COINMAG NewsroomStories researched and written by the COINMAG news desk from multiple independent reports.
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