Related to $500 Billion in Stargate

Related to $500 Billion in Stargate
I’m sharing it because I agree with you.

Stargate is a great name, but the $500 billion number is ridiculous, and no one should take it seriously unless SoftBank sells all its Alibaba and ARM shares.

SoftBank has $38 billion in cash, $142 billion in debt, and according to BBG, it generates about $3 billion in free cash flow (FCF). They own $143 billion worth of ARM and $18 billion worth of Alibaba shares. Once they start selling ARM shares, their equity value will drop very quickly.

Oracle has $11 billion in cash, $88 billion in debt, and generates $10 billion in FCF.

OpenAI is running out of cash.

MGX has not promised a specific number and is a $100 billion fund. In a best-case scenario, as much as 10% of the fund could be invested in the project.

Nvidia will limit how much it invests in a single model company (they don’t need an exclusive buyer). Probably around $5 billion.

Excluding the aforementioned sale of ARM by SoftBank, it will raise $50 billion in equity capital over the years. Of course, financing GPU purchases and debt issuance for joint ventures are possible.

It’s a far cry from $500 billion. I think everyone should start releasing press releases for a trillion-dollar AI project.

But it’s interesting that the stock price of biotech company MGX rose 33% on the news.

If you’re a professional investor or analyst and you’ve taken $500 billion at face value – worse, if you’ve written a report on it – you’re going to have to resign shamefully.