DEEP DIVE
COMPANION TO ISSUE #37 · 13 NOVEMBER 2026
Who Paid First
More and more of the AI build is funded by deposits, prepayments and guarantees. They don't trade and they don't pay coupons, and one of them just cost its owner $3.7bn.
The line was in SoftBank's consolidated financial report on Tuesday, against a subsidiary most shareholders had never heard of: Silver Bands 7 LLC. The description ran to eleven words, 'non-refundable advance payments made to secure manufacturing capacity and purchase equipment', and the number beside it was ¥457,030 million. About $2.85bn. No bond had missed a coupon. No lender had called anything in. Asked whether SoftBank had defaulted on its turbine orders, finance chief Yoshimitsu Goto said: 'There is no such default.'
He was right. Money was lost and nobody defaulted.
So the useful question isn't who has borrowed the most. It's who has paid first, who is holding that money, and what happens to it when plans change. This piece sorts the four ways money moves ahead of delivery, maps this week's examples, prices a second SoftBank trim in low, middle and high cases, and ends with a three-line check for any holding.
Sources: CellCog (SoftBank report lines) · Open Magazine (SoftBank explainer) · Dealroom (Goto; GE Vernova)
1. FOUR WAYS TO PAY AHEAD
Four kinds of money now move ahead of delivery in this build. They sit in different places in the accounts, and they fail in different ways.
Deposit or slot reservation
Who pays whom: A builder pays an equipment maker
Where it sits: Payer: advances, an asset. Receiver: customer deposits, a liability
What a loss looks like: Written off when the order is dropped
Customer prepayment
Who pays whom: A customer pays a cloud provider
Where it sits: Payer: prepaid asset. Receiver: deferred revenue
What a loss looks like: Late delivery; an unsecured claim if the provider fails
Guarantee
Who pays whom: A supplier backs its customer's lease
Where it sits: Off the balance sheet, in the commitments note
What a loss looks like: A payout if the customer can't pay
Supplier stake
Who pays whom: A supplier buys its customer's shares
Where it sits: Equity investments
What a loss looks like: A mark-down, slow to appear while the shares are unlisted
🌱 NEW TO INVESTING? HERE'S WHAT THIS MEANS Deferred revenue is a debt paid in service, not cash. When a customer pays a year ahead, the provider books a liability: it owes that customer a year of computing. Deliver late and the liability doesn't go away. It just sits there.
2. THIS WEEK'S MAP: WHO HOLDS WHOSE MONEY
Here is who paid whom, on this week's disclosures. Don't add the column up. These are different kinds of promise.
SoftBank
Who holds it: Power-equipment makers, reportedly GE Vernova above all
How much: $9.48bn paid by 30 Sep; $2.85bn written off; about $6.6bn still on the books
Status: Disclosed
CoreWeave's customers
Who holds it: CoreWeave
How much: About $9bn expected within three months
Status: Guidance
Nebius's customers
Who holds it: Nebius
How much: $10bn expected in 2026; $17bn–$20bn in 2027
Status: Guidance
Microsoft
Who holds it: IREN
How much: 20% of a contract worth about $9.7bn
Status: Reported contract terms
Seven chip and cloud companies
Who holds it: Anthropic
How much: $26bn of non-voting stock at the IPO price
Status: Filed; completes with the IPO
Nvidia
Who holds it: SB Energy, OpenAI's landlord in Ohio
How much: Lease guarantees capped at $105bn, plus $1.5bn of equity
Status: Filed
Sources: Open Magazine (SoftBank explainer) · FourWeekMBA (SoftBank, GE Vernova) · CoreWeave Q3 call (AOL) · Nebius Q3 call (Motley Fool) · Blockspace (IREN contract) · FinanceFeeds · Nvidia 8-K, 17 Aug (SEC)
Two things stand out. The money runs in every direction: builders pay suppliers, customers pay builders, suppliers pay customers. And only one row has been tested so far. SoftBank's.
3. WORKED EXAMPLE: WHAT A SECOND TRIM WOULD COST SOFTBANK
SoftBank is the cleanest public case, because it has told us what walking away cost. Everything in the first table is disclosed. Everything in the second is assumption, so each line gets a low, middle and high value. The point isn't the answer. It's seeing what moves it.
Disclosed (SoftBank, to 30 Sep 2026) | Figure |
|---|---|
Paid ahead by Silver Bands 7 | ¥1,500.9bn ($9.48bn) |
Non-refundable advances written off | ¥457.0bn ($2.85bn) |
Contract changes and settlements | ¥140.2bn ($0.88bn) |
Total charge | ¥597.2bn ($3.73bn) |
Advances still on the books | about $6.6bn |
Rebates on future purchases, not booked | up to $2.1bn over ten years, conditional |
Sources: Open Magazine (SoftBank explainer) · CellCog (SoftBank report lines) · Invezz (SoftBank) · FourWeekMBA (SoftBank, GE Vernova)
Share of the remaining $6.6bn given up
Low: 10%
Middle: 25%
High: 40%
Basis: Assumption. The first round wrote off about 30% of everything paid
Advances forfeited
Low: $0.66bn
Middle: $1.65bn
High: $2.64bn
Basis: Assumes the whole advance on a dropped order is lost, as in round one
Settlement costs on top
Low: $0.20bn
Middle: $0.51bn
High: $0.82bn
Basis: 31% of forfeited advances, the first-round ratio ($0.88bn ÷ $2.85bn)
Further charge
Low: $0.86bn
Middle: $2.16bn
High: $3.46bn
Basis: Forfeited advances + settlements
Further charge ÷ first charge
Low: 23%
Middle: 58%
High: 93%
Basis: Scenario comparison, not a forecast
Cost of carrying the $6.6bn, per year
Low: $0.34bn
Middle: $0.46bn
High: $0.59bn
Basis: At 5.1% (the 10-year Treasury yield), 7% and 9%. SoftBank's own rate isn't disclosed
Sources: Open Magazine (SoftBank explainer) · FourWeekMBA (SoftBank, GE Vernova) · Capp Notes (12 Nov close)
What moves the answer. One assumption does nearly all the work: how much more SoftBank drops. The forfeiture rate matters too, and it's inferred. SoftBank calls the advances non-refundable, but neither it nor any supplier has said how many gigawatts were cancelled. One analyst's estimate is about 4GW out of more than 13GW reserved, close to the 30% of the money that was lost. If that's right, you lose what you paid on what you drop.
What could shrink it. The rebates, if SoftBank keeps buying. And need: it says its Ohio campus isn't being cut back, and the plan for that site includes at least 9.2GW of gas generation, so much of what remains may simply get used.
WHAT THE EXAMPLE SHOWS, AND WHAT IT DOESN'T It shows why Issue 37 set a write-offs test. A buyer that reserved in a shortage and trims in a slowdown takes the loss in one line, in one quarter, with no warning from the credit markets. The middle case would be a second charge of about $2.2bn. It doesn't show that a second trim is coming. That depends on SoftBank's 'thorough reassessment' of procurement, which nobody outside the company can see. February's results are the first check.
4. THE RECEIVER'S SIDE: CHEAP MONEY, WITH STRINGS
For whoever holds the cash, a prepayment is the cheapest funding going. CoreWeave expects about $9bn from customers within three months. Here's what borrowing it would cost instead.
On its next secured loan (guided 7% to 7.5%)
Rate: 7.25%
Interest a year: $0.65bn
Share of annualised Q4 interest guide: 15%
At its average cost of debt
Rate: 7.9%
Interest a year: $0.71bn
Share of annualised Q4 interest guide: 16%
At the yield on its 2032 unsecured notes, 11 Nov
Rate: 14.2%
Interest a year: $1.28bn
Share of annualised Q4 interest guide: 29%
So the saving is real. It comes with three strings.
It has to be delivered. More than $3bn of CoreWeave's $9bn relates to infrastructure that's already paid off; the rest is a promise of capacity. Nebius signed prepayments that more than cover its third-quarter builds, then cut its 2026 revenue outlook because data centres it doesn't own ran late. IREN can owe Microsoft delay credits if its Texas phases slip past early 2027.
Booked isn't collected. Nebius's deferred revenue rose $3.43bn in the quarter. Its receivables rose $3.76bn, and operating cash flow was negative $273m. Some of what customers have promised up front hasn't arrived yet.
A reservation isn't an order. GE Vernova ended September with 64GW of gas-turbine orders and 58GW of slot reservations. It turned 13GW of reservations into orders during the quarter, and says SoftBank's change has no impact on it either way. Fine. The 58GW is still the number I'd watch.
Sources: CoreWeave Q3 call (AOL) · Nebius Q3 letter (SEC) · Blockspace (Nebius) · TIKR (IREN delay credits) · GE Vernova Q3 release (SEC) · Dealroom (Goto; GE Vernova)
5. THE GUARANTOR: NVIDIA'S PROMISES AGAINST ITS CASH
Nvidia carries the build's largest book of promises, and until Thursday one man was its public face. These figures are from the second-quarter CFO commentary, the last before Tuesday's results.
Nvidia, quarter to 26 Jul 2026 | Figure |
|---|---|
Cash and marketable securities | $56.6bn |
Guarantees, maximum gross exposure | $108.5bn, of which $105bn backs OpenAI's Ohio leases |
Supply and capacity commitments | $279bn, up from $119bn a quarter earlier |
Committed future equity investments | $25bn |
Multi-year cloud service agreements | $29bn |
Quarterly revenue, for scale | $96.2bn |
Read the guarantee carefully. It isn't cash out of the door. Nvidia pays only if OpenAI fails to pay a lease, and then only the shortfall left after the landlord re-lets or sells. The first phase isn't expected to take effect until fiscal 2029, and the whole thing lapses if OpenAI earns a satisfactory credit rating. Against revenue of $96bn a quarter, that's bearable.
The open question is the next one. Nvidia holds an option to back about 3.8GW more at the same campus, and has since agreed to put $10bn into Anthropic's share sale. I don't know what a board with a new chair, an interim chief executive who is also the finance chief, and three House committees asking questions does with that sort of discretion. My guess is: less. It's only a guess, and Tuesday's guarantee table is the first evidence either way.
Sources: Nvidia 8-K, 17 Aug (SEC) · Nvidia Q2 CFO commentary (SEC) · Nvidia 8-K (SEC) · FinanceFeeds · CNN (Congress)
6. THE CIRCLE: WHEN SUPPLIERS FUND THE BUYER
Anthropic's sale closes the loop. Seven chip and cloud companies will buy $26bn of non-voting stock at the IPO price, led by Google and Nvidia at $10bn each. Anthropic's commitments to buy compute and infrastructure stood at about $895bn at the end of September, so a slice of that $26bn comes back to the same companies as orders. Last week's deep dive has the full table.
Two readings. For the suppliers, it's a stake in a customer, bought with money the customer will largely spend with them. For Anthropic, it's the reverse of SoftBank's position: about $84.6bn of net proceeds at the midpoint, and termination rights over roughly $213.8bn of those commitments. It promises a great deal and pays ahead rather less. That's the stronger seat, for as long as suppliers allow it.
Sources: FinanceFeeds · TechCrunch (proceeds) · Anthropic S-1/A (SEC)
7. WHAT TO WATCH
17 Nov · after close
Checkpoint: Nvidia Q3
What would change the picture: The guarantee table: above $108.5bn, unchanged, or new language about limits
18 Nov (reported)
Checkpoint: Anthropic prices
What would change the picture: Where in $70–$78 it lands, and the $26bn placement completing alongside
9 Dec
Checkpoint: Fed decision
What would change the picture: A half point raises the carry on every row of the map
Late Jan 2027 (expected)
Checkpoint: GE Vernova Q4
What would change the picture: Slot reservations against 58GW; the 130GW year-end target; any cancellations disclosed
Feb 2027 (expected)
Checkpoint: CoreWeave Q4; SoftBank Q3
What would change the picture: Prepayments received against about $9bn; a second charge on advances
31 Mar 2027
Checkpoint: Test date
What would change the picture: One more write-off of $1bn or more on money paid ahead, anywhere in the build
Sources: Nvidia 8-K (SEC) · CNBC (Anthropic) · BBN Times (Fed) · GE Vernova Q3 release (SEC) · CoreWeave Q3 call (AOL) · Open Magazine (SoftBank explainer)
8. A THREE-LINE CHECK FOR ANY AI HOLDING
1 Paid ahead. Prepaid expenses, advances to suppliers and deposits, often tucked inside 'other assets'. Set the total against a year of capex. SoftBank's $9.48bn was in plain view before any of it was written off.
2 Been paid ahead. Deferred revenue, customer deposits, contract liabilities. Then look at receivables beside them. If both are climbing, some of that prepayment is still a promise.
3 Promised. Guarantees and purchase commitments. They live in the commitments note, not on the balance sheet. Set them against cash.
Then search the filing for 'non-refundable'. Three lines and one word, and you'll know which side of the deposit your holding sits on. I'd rather be wrong about this one. If I'm right, the next loss turns up the way SoftBank's did: in one line of a quarterly report, with nothing in the credit markets to warn you.
BEFORE YOU GO This piece backs up Issue 37's Investing Angle and its three tests: write-offs, deposits and slots. The weekly scoring lives in the Tripwire Tracker. Not subscribed? Subscribe
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. This publication is not a registered investment adviser. The worked example uses labelled assumptions and is illustrative, not a forecast. Always conduct your own research and consult a qualified financial professional before making investment decisions.