TOKYO – SoftBank Group Corp. has halted negotiations regarding a potential multibillion-dollar acquisition of U.S. data center operator Switch, according to people familiar with the matter. The pause marks a significant shift in billionaire Masayoshi Son’s aggressive strategy to dominate the infrastructure powering artificial intelligence.
The Japanese conglomerate spent months exploring an offer that valued Switch at around $50 billion including debt. Masayoshi Son, the founder of Switch, reportedly saw this acquisition as an important cornerstone in “Stargate“, a $500 billion initiative to develop a global network for AI infrastructure and high capacity computing power.
Sources indicate, however, that Son has recently backed away from the idea that he would take over the company, resulting in the cancellation of the announcement tentatively scheduled for late January. The two parties continue to discuss a small-scale partnership, or a minor investment despite the failure of the acquisition talks.
Strategic Setback for Stargate
SoftBank is at a crucial time. Son has been pivoting SoftBank toward “Artificial Super Intelligence”, liquidating a significant portion of SoftBank’s traditional venture capital holdings in order to fund capital intensive hardware and energy projects.
Controlling Switch, a company known for its massive, energy-efficient “Tier 5” data centers, would have provided SoftBank with the physical real estate and power capacity required to run the next generation of AI models for partners like OpenAI.
Complexity and Valuation
Industry analysts suggest the deal’s complexity and the sheer scale of the valuation may have played a role in the cooling of talks. Switch, which was taken private in 2022 by DigitalBridge Group and IFM Investors in an $11 billion deal, has seen its value skyrocket amid the global AI boom.
While SoftBank successfully closed a $4 billion acquisition of Digital Bridge’s investment management arm in late 2025 to bolster its infrastructure expertise, the much larger prize of Switch appears to be out of reach for now.
Looking Ahead
The halt in negotiations does not mean SoftBank is exiting the space. The company continues to hold a majority stake in chip designer Arm Holdings and has committed billions to Ampere Computing and OpenAI.
For Switch, the focus may now return to a potential initial public offering. Prior to the SoftBank discussions, the company’s backers were reportedly weighing a return to the public markets at a valuation that could exceed $60 billion. SoftBank and Switch representatives both declined to comment on the status of the discussions.