Musk Alleges SoftBank Defaulting on Turbine Orders as CDS Spreads Hit Four-Year High

Elon Musk asserted on Friday that SoftBank is defaulting on its turbine orders. The accusation arrived as the price of insuring against a SoftBank default reached its highest point in four years.

No confirmation has come from SoftBank or any turbine manufacturer. The moment is critical for the company's bondholders and shareholders, who are already exposed to the debt from its OpenAI investment.

Why Musk Trains His Sights on Stargate Again

Musk responded to an ex-aide who argued his early skepticism about Stargate was justified. OpenAI unveiled the AI infrastructure project with SoftBank and Oracle in January 2025, committing as much as $500 billion in total funding.

At that time, Musk argued the backers did not have the capital and that SoftBank had far less than $10 billion in hand.

The ex-aide combined those messages with new reports of a data center loan auction. An anonymous seller is offering around $500 million of these loans, covering finance for a Stargate location in New Mexico.

The seller's identity is not disclosed. Oracle, the site's primary lessee, issued a force majeure notice to its developer in September, a legal assertion that circumstances beyond its control can postpone its duties. Oracle has stated the project is still on track.

SoftBank is defaulting on their turbine orders

— Elon Musk (@elonmusk) November 6, 2026

Musk provided no source, supplier, or specific turbine type in his claim. He also refrained from stating that SoftBank is defaulting on its bonds.

Data center construction firms are increasingly turning to gas turbines for on-site electricity generation, and these machines are still in scarce supply.

Credit Markets Weigh the Cost of a SoftBank Default

SoftBank's five-year credit default swap (CDS), an instrument that compensates the holder if a borrower defaults, rose 22 basis points to 466 on Friday. This marks the highest spread since October 2022, according to Reuters reporting.

The method behind SoftBank's financing of its $64.6 billion OpenAI investment has drawn scrutiny from investors. The company took on debt at historically high yields, while OpenAI postponed its public listing until 2027.

Concerns that Democratic victories in the midterms could lead states to restrict data center building also surfaced. That anxiety fueled the $2 trillion rout on Wall Street on Thursday.

The sell-off subsequently extended into Asian markets, where SoftBank shares finished the day more than 10% lower in Tokyo. The equity has fallen over 40% in the last six months.

Musk's allegations, in contrast, train focus on the physical supply chain instead of the credit markets. Should they prove true, a SoftBank default on turbines would transfer the stress from lenders onto construction firms waiting for power gear.

This risk is already priced in. Penalties for data center delays can go as high as $5 million per day, with SoftBank's SB Energy numbered among the vulnerable builders.