A few weeks ago, SoftBank Group founder Masayoshi Son stood alongside U.S. President Donald Trump to unveil the Stargate Project, an artificial intelligence venture with OpenAI that could cost $500 billion (?75.9 trillion) or more. Now, Son is figuring out how to pay for it.
The Japanese billionaire is looking at a technique called project financing that is sometimes linked with oil and gas projects, according to people familiar with the matter. The strategy is used to build capital-intensive, large-scale infrastructure projects like the Trans-Alaskan pipeline ¡ª and has the big advantages that it typically requires less money upfront from anchor investors and can resort to long-term financing based on the project¡¯s expected cash flows.
SoftBank is exploring ways to incorporate some aspects of that funding structure in Stargate, which would span multiple datacenter and power-generation projects, said the people, asking not to be identified discussing private information. One scenario under discussion would have SoftBank, OpenAI and partners Oracle and Abu Dhabi¡¯s MGX contribute in equity about 10% of the overall cost and tap debt markets for much of the rest, said two of the people.
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