DigitalBridge to serve as SoftBank's third-party infrastructure arm after $4bn takeover

DigitalBridge joins SoftBank's AI strategy

SoftBank's roughly $4bn takeover of DigitalBridge closed on September 30, with the company continuing to operate as a separately managed platform led by chief executive Marc Ganzi. Ganzi told the Financial Times that DigitalBridge will serve as SoftBank's 'third-party infrastructure arm'.

The firm plans to raise money from institutional investors for data centres, power and other projects linked to SoftBank's AI expansion. The arrangement gives Masayoshi Son a vehicle to attract outside LP capital for the infrastructure layer of his AI build without putting it on SoftBank's own balance sheet.

Three layers of the AI stack

Son is positioning to control three layers of the AI stack: large language models through SoftBank's stake in OpenAI, chips through Arm, and power and data centres through DigitalBridge. DigitalBridge's role will include financing infrastructure projects connected to the Japanese group's AI expansion.

Caution about infrastructure financing

Ganzi described the current market as a 'toppy-esque moment' that felt 'very similar to the late 1990s'. He compared aggressive debt structures at newer rivals, operating at 70-80% loan-to-value ratios against DigitalBridge's 45%, to 'altitude sickness'.

He expects the coming cycle to be 'marked by a lot of amateurs and a lot of tourists in the next 24 to 36 months'. Ganzi also said capital behind Nvidia's chip-financing initiative is 'priced to perfection'.

Assets and portfolio companies

DigitalBridge's reported assets under management stood at roughly $108bn at the end of September. Its portfolio includes stakes in Vantage Data Centers, DataBank, Switch, AtlasEdge and Yondr Group.

Sources: Financial Times Via Ai Weekly