$500B Stargate AI project faces delays; SoftBank unfazed, eyes Arm growth
The ambitious $500 billion Stargate project, designed to establish a global network of AI data centers, is experiencing a slower-than-anticipated start. Despite this, its primary financial backer, Japan’s SoftBank, appears unconcerned about the initial delays.
During SoftBank’s first-quarter earnings announcement, Chief Financial Officer Yoshimitsu Goto acknowledged that the project is proceeding “slower than usual.” He attributed this pace to the complex challenges involved in identifying suitable sites for the massive data centers. “There are a lot of options, and it’s been taking time to select a good site,” Goto explained, highlighting the multitude of stakeholders involved. He noted that building consensus requires extensive discussions, alongside addressing various technical and construction issues.
Goto expressed confidence that once Stargate’s members, which include industry giants like Oracle, NVIDIA, and OpenAI, finalize a physical design and agree on funding mechanisms, the project will accelerate. Emphasizing a methodical approach, he stated, “We want to deliberately spend time to build the first model successfully.” He believes that while the initial phase might appear protracted, this careful groundwork is crucial for long-term success, and the company remains committed to its target of investing approximately $500 billion in data center builds over the next five years.
SoftBank itself reported a robust financial quarter, posting a $2.9 billion profit—a notable achievement for the conglomerate—with overall revenue climbing seven percent to $12.4 billion. This strong financial standing likely underpins its calm demeanor regarding Stargate’s initial hurdles.
A significant contributor to SoftBank’s positive outlook is the stellar performance of its UK-based chip design subsidiary, Arm. Arm reported $1.05 billion in revenue for the quarter, marking a 12 percent year-on-year increase. Revenue from chip design licenses saw even more rapid growth, surging by 25 percent. This strong performance positions Arm as a pivotal player in the burgeoning AI infrastructure landscape.
Looking ahead, SoftBank’s CFO made a bold prediction: half of all new server chips shipped to major cloud providers in 2025 will utilize Arm’s architecture. This forecast underscores Arm’s growing influence in the data center market, a critical component for scaling AI capabilities. Goto further highlighted Arm’s expanding enterprise adoption, noting that the number of businesses using Arm-based chips for cloud processing has grown more than fourteen-fold since 2021, exceeding 70,000 in 2025. This widespread adoption solidifies Arm’s foundational role in the very infrastructure Stargate aims to build.
In essence, while the ambitious Stargate project navigates its complex planning stages, SoftBank’s overall financial health and the exceptional growth of its key asset, Arm, provide a solid foundation, reinforcing the company’s long-term vision for global AI infrastructure.