SoftBank, along with its partners OpenAI, Oracle, and MGX, is exploring financing possibilities for the ambitious $500 billion Stargate project.
Funding for the Stargate Project
According to Bloomberg, SoftBank and its partners, including OpenAI, Oracle Corp., and Abu Dhabi's MGX, aim to use a financing strategy that enables them to cover only 10% of the project's total cost through equity, utilizing debt markets for the remainder.
Investment Structure and Equity Involvement
The project requires an initial investment of $100 billion. SoftBank has not yet determined the sources of funding and is engaging in talks to attract new investors. The funding structure may include common equity at 10%, preferred equity, and mezzanine debt at 20%-40% combined, followed by senior debt between 50%-70%.
Stargate Expansion and Future Challenges
Stargate, one of the largest AI datacenter projects, has commenced its rollout in Abilene, Texas, with further development planned across multiple U.S. states. Challenges the project might face include future hurdles posed by OpenAI's leadership.
The specifics of the financing details have not yet been fully disclosed by SoftBank and OpenAI.
