SoftBank is committing €75 billion to develop 5 gigawatts of AI data centers in France. This marks Son's largest investment in Europe.

      SoftBank plans to invest up to €75 billion ($87 billion) to establish 5 gigawatts of AI data centre capacity in France, marking its largest AI infrastructure investment in Europe. The announcement is expected to be made by CEO Masayoshi Son and President Emmanuel Macron at the Choose France Summit this weekend.

      The initial phase involves an investment of €45 billion to develop 3.1 gigawatts across three locations in the Hauts-de-France region by 2031: Dunkirk, Bosquel, and Bouchain. Schneider Electric will partner strategically at the Dunkirk site, which will serve as a hub for AI infrastructure and robotics manufacturing to cater to London, Brussels, and Amsterdam.

      This investment showcases personal diplomacy; Son expressed his admiration for Macron's commitment to France's economic success during a discussion with La Tribune. Macron had reached out to Son during a visit to Japan earlier this year, a move that intrigued Son, who is usually approached by corporate executives.

      Bloomberg previously reported that Son had considered investing up to $100 billion in France. While the confirmed €75 billion commitment is somewhat lower, it still represents one of the largest single AI infrastructure investments any country has received.

      This initiative adds to SoftBank's impressive record of AI infrastructure investments. In March, the company announced a significant data centre project in Ohio that could attract $500 billion for 10 gigawatts of capacity, powered by approximately $33 billion in natural gas-fired electricity. SoftBank is also involved in the $500 billion Stargate initiative with OpenAI, Oracle, and Abu Dhabi’s MGX for building data centres in the US, and has committed over $60 billion to OpenAI for a roughly 13% stake. The magnitude of these commitments raises concerns regarding financing.

      SoftBank has reduced its plans for a $10 billion margin loan backed by its OpenAI stake due to reluctance from some creditors, with discussions now centered on a target as low as $6 billion. Investors are keenly observing whether Son can secure enough capital to simultaneously realize all his AI goals.

      The economics of operating AI data centres in Europe are challenging. OpenAI has paused its Stargate UK project due to industrial electricity costs that exceed four times those in the US. France benefits from its electricity grid, which is around 70% nuclear-powered, offering low-carbon baseload capacity that most European countries lack.

      In contrast, the Gulf's AI data centre aspirations have been hindered by war, with rising oil prices and closed shipping routes leading to investment delays. France's political stability and nuclear energy foundation position it as a lower-risk alternative for AI infrastructure investment that might have gone to the Middle East.

      Macron has made sovereign AI a policy priority, emphasizing that nations beyond the US and China must develop their own infrastructure to retain control over their data and technology. France has also supported Mistral AI, a Paris-based foundation model company that achieved $300 million in annual recurring revenue earlier this year. SoftBank’s investment affirms the sovereign AI strategy at a scale unmatched by any European government initiative.

      The choice of energy sources is crucial. SoftBank’s Ohio project utilizes natural gas, while xAI is investing $2.8 billion in gas turbines. France’s reliance on nuclear power means that SoftBank’s French data centres could operate on significantly lower-carbon energy compared to their US counterparts, which is both an environmental and competitive advantage for Macron.

      The Choose France Summit serves as Macron's annual platform to attract foreign investment, with past events securing commitments from Microsoft, Google, and Amazon. SoftBank’s €75 billion investment far surpasses these previous commitments. However, the real test lies in whether the investment is realized at the promised scale and speed, a challenge typical for large infrastructure projects. Son's vision is impressive, but his record on execution is more mixed. France is hopeful that this time, the funding will materialize.