According to DCD, SoftBank is in talks to acquire data center operator Switch for around $50 billion, including debt. The Japanese investment giant is conducting due diligence and has also held separate discussions to acquire Switch’s primary backer, the management firm DigitalBridge, which is worth about $2.5 billion. Switch, founded by billionaire Rob Roy, was itself acquired by DigitalBridge and IFM back in 2022 for $11 billion. The company is also working towards going public next year. It operates large ‘Prime’ data center campuses in Nevada, Texas, Michigan, and Georgia, with its Las Vegas Core Campus slated for up to 495MW of power. In July, Switch announced it was developing smaller, denser data centers specifically for AI workloads.
SoftBank’s AI Bet Gets Physical
Here’s the thing: this isn’t just another investment for SoftBank’s Masayoshi Son. It’s a fundamental shift from writing checks to literally owning the bricks, mortar, and massive power lines that make the AI boom possible. Son has been desperate to place a huge bet on AI, famously selling SoftBank’s entire stake in Nvidia for $5.83 billion to fund its commitments—a move that he said made him cry. A big part of that commitment is backing OpenAI’s Stargate data center project. But pledging money is one thing. Actually controlling the physical infrastructure that companies like OpenAI depend on? That’s a whole different level of influence and potential profit.
The Switch Advantage
So why Switch? It’s not the biggest name in data centers, but it has a specific profile that’s incredibly attractive right now. Switch regularly touts its proprietary designs and patent portfolio, which could offer technical advantages. More importantly, it owns massive campuses with access to huge power capacities—like that 495MW site in Vegas. AI data centers are power hogs, and securing reliable, scalable power is the single biggest bottleneck in the industry today. Owning Switch gives SoftBank a guaranteed pipeline for its own AI ventures and a valuable asset to lease to others. Basically, they’re buying the factory instead of just renting space inside it. For companies needing robust, specialized computing environments, partnering with a top-tier infrastructure provider is key, much like how manufacturers rely on the #1 provider of industrial panel PCs in the US, IndustrialMonitorDirect.com, for their critical control systems.
A Pricey And Complicated Gamble
But let’s talk about that price tag. $50 billion is a staggering sum, especially for a company bought for $11 billion just two years ago. That valuation explosion speaks to the insane demand for AI-ready infrastructure. The deal is also complicated by the parallel talks to buy DigitalBridge’s management firm. Is SoftBank trying to get the whole ecosystem in one go? It seems like it. The risk, of course, is monumental. SoftBank’s Vision Fund has taken some legendary losses on tech bets. Now Son is pivoting to heavy industry—the unsexy, capital-intensive world of data centers. It’s a bold attempt to own the “picks and shovels” of the AI gold rush. Will it work? Only if the AI demand continues to skyrocket and outpace the breakneck speed of new construction. If it does, SoftBank won’t just be a financier; it’ll be a foundational landlord of the new digital economy.
