SoftBank’s $4B DigitalBridge Deal Locks in AI Infrastructure—and Big Risks

SoftBank’s move to acquire DigitalBridge represents a strategically bold pivot toward owning rather than simply financing critical infrastructure that underpins the AI boom. With generative models, cloud gaming, edge compute, and real-time analytics as rapidly expanding workloads, demand is shifting not just for chips and software but for power, connectivity, data center real estate, and fiber networks. By bringing DigitalBridge’s architecture into its fold, SoftBank gains direct exposure to these “picks and shovels” of AI infrastructure. [1][7]

Financially, the deal’s pricing—$16 per share in cash—shows SoftBank willing to pay sizeable premiums: ~15% over recent close and ~50% over unaffected 52-week average. [1][6][7] However, publicly available information suggests DigitalBridge had operating challenges: revenue declines, high P/E multiples, and underperformance relative to its asset base. Thus, much of the valuation seems driven by strategic value rather than current earnings or cash flow metrics, betting on long-term infrastructure scarcity and demand growth. SoftBank’s ability to integrate these assets, manage costs (especially energy), and win contracts for capacity will be vital to realizing returns.

Institutionally, this reinforces a broader trend of consolidation in digital infrastructure: hyperscale providers, telecoms, private equity, and strategic trade buyers are accelerating purchases of physical infrastructure. [2] SoftBank is leveraging its capital reserves—recycling proceeds from other divestments (e.g., its sale of Nvidia stake) and aligning with its larger “Stargate” initiative with OpenAI, Oracle and partners to build compute-capacity and ensure U.S. infrastructure independence.[1] Control over energy, location, environmental permitting, and regulatory landscape becomes a differentiator in how effectively AI initiatives scale.

Risks remain substantial: first, regulatory and antitrust hurdles in the U.S. and globally may slow closing or force divestitures. [1] Second, capital and energy costs—particularly for power-hungry data centers—can erode margins. Third, overpaying for assets in an environment where infrastructure multiples are already elevated adds financial risk if demand softens or competition intensifies. Finally, integration risk: although DigitalBridge will operate independently post-close, aligning incentives, pipeline access, and operating leverage under SoftBank’s ownership will challenge management.

Open questions include: how SoftBank plans to spend its capital—will it lean more on SoftBank capital or LP/investor capital via DigitalBridge’s fund business? Will it expand footprint internationally using DigitalBridge’s global presence? How does this acquisition shift competitive dynamics among AWS, Microsoft, Google, Equinix and specialized infrastructure players? And, what is the projected return profile given the high multiple paid and near-term revenue pressures?