SoftBank in talks to acquire DigitalBridge for AI infrastructure push
What's the story
SoftBank Group, the Japanese telecom and tech conglomerate led by Masayoshi Son, is considering an acquisition of DigitalBridge Group Inc, according to Bloomberg. The move comes as part of SoftBank's strategy to capitalize on the artificial intelligence (AI) boom and its impact on digital infrastructure. DigitalBridge is a private equity firm that invests in data centers and other related assets.
Deal timeline
Potential acquisition could be finalized by year's end
The potential deal to acquire the New York-listed DigitalBridge and take it private could be finalized by the end of this year. The talks are still ongoing and there's no guarantee they will result in an agreement. If successful, this acquisition would mark a major step in SoftBank's efforts to bolster its position in the AI-driven digital infrastructure market.
Market reaction
DigitalBridge's shares surge amid acquisition talks
The news of the potential acquisition has sent DigitalBridge's shares skyrocketing. The company's stock price closed at $14.12 on Friday, giving it a market value of $2.58 billion after a 13% decline this year. This marks DigitalBridge's biggest one-day gain ever, with its shares soaring as much as 45% at Friday's close.
Strategic assets
Portfolio and SoftBank's AI infrastructure plans
Under the leadership of CEO Marc Ganzi, DigitalBridge managed assets worth $108 billion at the end of September. Its portfolio includes digital infrastructure operators like AIMS, AtlasEdge, DataBank, Switch, Vantage Data Centers, and Yondr Group. Meanwhile, SoftBank has been making moves to tap into the surging demand for computing power that forms the backbone of AI applications.
Project hurdles
Stargate project and funding challenges
In January, SoftBank announced a project called Stargate with OpenAI, Oracle Corp., and Abu Dhabi's MGX to build data centers in the US. While Son promised to invest $100 billion "immediately," the rollout has been slower than expected due to disagreements over data center locations. SoftBank had sought project financing from external investors like insurance companies, pension funds, and investment funds. However, some talks have slowed down due to market volatility and uncertainty around US trade policy.