SoftBank to scale back on $500B Stargate expansion if financing deteriorates: CFO Yoshimitsu Goto

SoftBank CFO Yoshimitsu Goto said the financing for the Stargate Project will be structured carefully, and its growth will slow if necessary in challenging debt markets, dismissing Elon Musk's recent remarks over the firm’s ability to raise the colossal $500 billion for the project.

“I saw Elon Musk's comment, and don't believe any emotional response will have any good results. So, I'll just wait and see how it goes. We have a long history of addressing project financing, and we have a lot of experience, so maybe we can wait,” said Goto. 

Doubling down on the demand for AI infrastructure, US President Donald Trump recently announced the Stargate Project—a joint venture between OpenAI and SoftBank—to build data centres and create over 100,000 jobs in the US.  

The venture was initially funded by SoftBank and OpenAI, who will serve as the primary partners, along with Oracle and Abu-Dhabi-based MGX. The Japanese investment bank took on the responsibility of overseeing financial responsibilities with OpenAI managing operations. 

“Having the Stargate Project start, we may face a difficult moment for debt financing… but if we face a difficult time for debt financing, we should slow down the speed of the project,” said Goto during the earnings call held on Wednesday.

He added, “Probably that will be the way because this type of product may be very much acceptable for the debt financing market and, if we face the difficulty—meaning that the financial market itself may be in difficult situations—so that we shouldn’t make too much of a stretch.” 

Goto said that SoftBank's broader goal is to “accelerate the AI revolution” by building robust infrastructure. The Stargate Project, set to deploy up to $500 billion over four years, will begin with an initial allocation of $100 billion.

He revealed that SoftBank aims to secure project financing—a model commonly used in energy infrastructure, with plans to offer various debt products targeted at banks, insurers, pension funds, and other investors—to cover most of the costs associated with deploying its AI infrastructure in the US.

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“$500 billion is quite an eye-opening number. It is not that SoftBank Group will be solely raising funds through assets or cash amounting to tens of trillions of yen. Instead, we would like to set up the project together with lenders and equity investors,” the CFO added.

With the financing structured on a per-project basis, with each receiving its own dedicated funding, the venture may reach or exceed $500 billion in investment, starting with Project One as a foundational step, Goto said.

Subsequently, the remaining three projects will roll out sequentially or in parallel, strategically located across various regions to build data centres, deploy chip systems, and ensure a stable power supply.

In the third quarter of FY24, SoftBank reported a loss of 369.16 billion yen (around $2.4 billion), largely due to a sharp decline in the share prices of several of its major portfolio companies.

Multiple reports have indicated that the Masayoshi Son-led firm is in discussions to potentially invest up to $25 billion in OpenAI, as competition in the sector heats up, especially with China DeepSeek’s entering the AI market.