GE Vernova shares fall after SoftBank adjusts plans for U.S. data center project

Vallari Srivastava/Sumit Saha

Reuters, November 10 - On Tuesday, shares of power equipment manufacturer GE Vernova (GEV.N) fell more than 6% after Japanese investment company SoftBank (9984.T) revised its equipment procurement plans for a U.S. data center project.

Analysts said GE Vernova is among the companies participating in SoftBank’s construction of a massive gas-fired power plant and data center project in Pike County, Ohio.

The 10-gigawatt artificial intelligence server center project is supported by a newly built 9.2-gigawatt natural gas power facility and, if completed, would rank among the largest in the world.

JPMorgan analysts said SoftBank adjusted certain power equipment procurement strategies for its U.S. data center projects, including the one in Ohio, which led to a $3.7 billion charge (link) in the second quarter.

JPMorgan analysts wrote in a research report that the Ohio project is still proceeding as planned, but contracts are being revised.

"This is negative news because it signals that a major data center developer is reconsidering its power equipment plans," JPMorgan said.

Billionaire Elon Musk said in a post on X last week that SoftBank had failed to fulfill its turbine order. However, SoftBank denied this claim and added that there have been no discussions about scaling down the Ohio project at present.

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"While we cannot comment on individual customer relationships, SoftBank’s recent announcement has had neither a negative nor positive impact on GE Vernova," a GE Vernova spokesperson said on Tuesday.

JPMorgan stated that even if there is a delay in turbine deliveries, GE Vernova would likely allocate those delivery slots to other customers.

This sell-off comes at a time when concerns about returns in the AI industry are mounting, and the Democratic Party’s sweeping victory in the U.S. midterm elections has further heightened expectations for regulatory scrutiny and delays in data center construction.

"While the specific impact on GE Vernova’s orders is unclear, investors are worried that a slowdown in AI infrastructure spending could affect future demand for turbines," said CrispIdea analyst Abhishek Rai.

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