Why SoftBank is betting $4 billion on DigitalBridge as AI infrastructure heats up

Core Viewpoint - SoftBank announced the acquisition of DigitalBridge for $16 per share, totaling approximately $4 billion including debt, indicating a strategic move to consolidate AI infrastructure assets amid growing demand for computing capacity in the AI sector [1]. Group 1: Acquisition Details - The acquisition price of $16 per share reflects a significant discount compared to DigitalBridge's asset base, which manages around $108 billion in digital infrastructure assets, while the company's equity value stands at only $2.54 billion [5]. - DigitalBridge's stock surged over 50% in premarket trading, jumping from $13.62 to $20.10, driven by investor enthusiasm for digital infrastructure and the anticipated acceleration of AI infrastructure development [2][3]. - Analysts had previously set price targets for DigitalBridge, with RBC Capital raising its target to $23 shortly before the announcement, indicating that SoftBank's offer was in line with market expectations [4]. Group 2: Strategic Importance - The acquisition aligns with SoftBank's AI strategy, as it seeks to control essential physical assets necessary for AI operations, including power and cooling infrastructure, which are critical bottlenecks in scaling AI [7][8]. - DigitalBridge's portfolio includes key operators like Vantage Data Centers and Switch, providing SoftBank with prime locations for deploying AI workloads and enhancing its operational capabilities [8][11]. - By taking DigitalBridge private, SoftBank can streamline decision-making and capital allocation towards AI-related projects without the constraints of public market reporting [9][10]. Group 3: Future Prospects - The integration of DigitalBridge with SoftBank's Stargate initiative, which aims to build 10 gigawatts of AI compute capacity, unlocks significant growth potential and operational efficiency in AI infrastructure expansion [10][11]. - DigitalBridge's global footprint and partnerships, such as with KT Corporation for AI-grade data centers, position it well for future growth in the AI sector [9].