SoftBank said to weigh acquisition of US data center firm

SoftBank Group is considering an acquisition of Switch, a US-based data center operator, as it seeks to expand its presence in AI infrastructure, according to sources familiar with the matter.

The Japanese conglomerate has reportedly held talks with Switch and is conducting due diligence, but no deal has been finalized.

Switch’s owners are said to be seeking a valuation of about US$50 billion, including debt, and are also preparing for a possible IPO with a target valuation of around US$60 billion.

There is no certainty that SoftBank will proceed with a Switch acquisition.

SoftBank is also in talks about acquiring DigitalBridge Group, a New York-listed investment firm and one of Switch’s main backers.

A consortium including DigitalBridge and IFM Investors acquired Switch in 2022 for US$11 billion.

SoftBank has announced several moves in the AI and data center sector this year, including the acquisition of Ampere Computing for US$6.5 billion, and a proposed US$5.4 billion deal for ABB’s robotics unit.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Switch’s US$50 billion valuation looks high next to peers

A US$50 billion enterprise value (includes debt) would be a multiple jump from its 2022 take-private. EBITDA stands for earnings before interest, taxes, depreciation and amortization.
Digital Realty posted US$1.4 billion Q4 2024 revenue with US$751 million adjusted EBITDA, while Equinix had US$2.26 billion revenue with US$1.01 billion adjusted EBITDA 1.
Since 2024, Switch raised US$20 billion through sustainable financing (loans or bonds tied to environmental goals) and is building campuses with liquid cooling up to 2 MW per rack 2.
With no disclosed revenue or EBITDA, given the US$420 million Data Foundry purchase at 19x estimated 2021 EBITDA 3, a US$50 billion ask assumes contracted pipeline value (customer commitments for future capacity) plus margins that remain opaque.

Texas buildout gives construction suppliers a power timing edge

The company is adding campuses in Round Rock on 32.48 acres plus another under a mile away, and nearby Austin assets can scale to about 100 MW 4.
Vendors for hybrid air plus liquid cooling, high-density power distribution, electric substations should watch permits and schedules to line up bids in Texas 4.
Switch is procuring up to 12 GW of nuclear power from Oklo reactors (Oklo is a developer of small modular nuclear reactors) by 2044 under long-term power purchase agreements, opening work for partners and grid interconnection specialists 5.
Power gear makers should follow builds in Grand Rapids in Michigan. Atlanta in Georgia has work underway with long-term contracts in hand 2.