SoftBank Group has reported the acquisition of Foxconn Technology Group's Ohio plant for $375 million to support the Stargate project focused on building AI data centers.
Deal Objectives and Details
The transaction between SoftBank and Foxconn remains private, with sources declining to be identified. The primary aim of the acquisition is to integrate Foxconn into SoftBank's plans to build AI data centers across the United States. The Stargate initiative aims to create over 100,000 jobs nationwide. The project had been stalled for six months since its announcement in January.
Reviving the Stargate Project
The Stargate initiative was announced in January by the U.S. President as a private-sector investment. The total cost of the project is expected to reach approximately $500 billion. It is to be implemented in partnership with Oracle, SoftBank, and OpenAI. The acquisition of the Ohio plant may be seen as a step to revive the project, which has faced financial difficulties and a lack of consensus among partners.
Prospects for Foxconn and SoftBank
Foxconn will operate the Ohio facility and is set to manufacture AI servers there. This entity is owned by Hon Hai Precision Industry Co., which has also been the first investor in SoftBank's plan. Currently, it is unclear if the acquisition of the plant is related to the $1.47 billion joint venture deal between Foxconn and SoftBank aimed at establishing a data center and manufacturing plant in the U.S.
The acquisition of the Ohio plant by SoftBank could provide a new impetus for the Stargate project, which has faced several financial and strategic challenges. The company's future steps in this direction will depend on the final assessment of construction sites and the establishment of new partnerships.
