SoftBank and Meta are making significant progress on a massive data center initiative.
SoftBank, the Japanese investment firm led by Masayoshi Son’s son, has bought an electric vehicle factory from Foxconn, which is a major supplier based in Ohio. This purchase is a strategic move to get the Stargate project rolling, which involves a collaboration between SoftBank, OpenAI, Oracle, and MGX, aiming to pour $500 billion into AI infrastructure across the U.S.
On the other hand, Meta is engaging with U.S. bond powerhouse Pimco and alternative asset manager Blue Owl to secure $29 billion for expanding data centers in rural Louisiana. Pimco is set to handle around $26 billion in debt, while Blue Owl is contributing about $3 billion in stock, as reported by sources.
None of the companies—SoftBank, Foxconn, Meta, Pimco, or Blue Owl—have responded yet to inquiries for comments.
There’s a fierce competition among tech companies to establish robust data centers nationwide, especially with President Trump advocating for increased domestic investment.
SoftBank approached Foxconn to facilitate the development of a larger data center in the U.S., and the sale of the electric vehicle plant appears to stem from those discussions.
This week, Foxconn’s main group, Hon Hai Precision Industry, confirmed it would sell the facility to Crescent Dune LLC for $375 million, though details about the buyer have not been disclosed.
For SoftBank, Hon Hai’s engagement in the data center project is promising, as this unit was SoftBank’s initial investor for its venture capital fund.
According to reports, these entities will not only operate the plants but will also utilize their facilities for manufacturing AI servers and potentially for hosting data centers.
Earlier this year, each firm invested $735 million in partnerships aimed at developing data centers in the U.S. However, it’s unclear if SoftBank’s stake in that venture encompasses the payments for the vehicle plant.
Additionally, Bloomberg indicates that Meta is collaborating with Morgan Stanley to raise capital and identify partners who can support its AI initiatives.
Last week, Meta announced plans to sell about $2 billion in data center assets as part of its strategy to lessen the financial burden of constructing these costly facilities.
Mark Zuckerberg, Meta’s CEO, has committed hundreds of billions towards this effort and revealed the establishment of a new division dedicated to super intelligence. He mentioned that the company’s first multi-gigawatt data center is expected to launch next year and another facility, Hyperion, could grow to 5 gigawatts over the coming years.
As data center expansions surge across the country, some local residents are expressing discontent regarding the vast water and energy consumption required to maintain these operations.
In Tucson, Arizona, local officials have put the brakes on $3.6 billion worth of Amazon-related data center projects, unanimously opting for further discussions with developers. This vote halted all progress on Project Blue, which was slated to occupy 290 acres in Pima County.
While Amazon hasn’t commented on this development, the county officially approved the land sale, though the overall project still needs a development plan approval.
Recent meetings about the project drew between 800 and 1,000 irate residents, who protested the significant water and energy demands of the proposed data center, as noted by Tucson Sentinel. Although the project was projected to generate $250 million in tax revenue and create 3,000 temporary jobs alongside around 180 permanent positions with an average salary of $64,000, the developers stated their commitment to hire only 75 workers.
