SoftBank purchases Foxconn's Ohio factory for manufacturing Stargate AI servers, reportedly sealing a $375 million deal, with Foxconn expected to keep running the facility's operations.

SoftBank and Foxconn Expand Partnership, Ohio Facility to Become AI Infrastructure Hub

In a significant development, Masayoshi Son, the CEO of SoftBank, has pledged $100 billion towards building data centers, energy facilities, and related projects, as announced in January 2023. This move is part of a broader strategy to bolster the company's AI capabilities.

One of the key aspects of this strategy involves a closer partnership with Foxconn, the world's largest supplier of AI servers. Earlier this month, Foxconn sold its production facility in Lordstown, Ohio, to SoftBank, marking a significant step in this partnership. The Ohio complex, spanning 6.2 million square feet, is six times larger than Foxconn's Houston facility, which is also being expanded for AI server production.

The decision to acquire the Lordstown facility was driven by several factors, according to Foxconn Chairman Young Liu. These include the available power capacity, large land area for further expansion, and the urgency to move quickly on the Stargate schedule, which aims to build $500 billion AI infrastructure over the next several years.

The Stargate project, a collaboration between OpenAI, Oracle, and SoftBank, was announced in January 2023. The new Ohio base will become another important production center in Foxconn's network, exclusively producing infrastructure components used by SoftBank, Oracle, and OpenAI. This arrangement almost guarantees a steady flow of orders for the Ohio facility.

SoftBank is currently evaluating multiple locations for data centers, considering factors such as energy supply, water resources, and telecommunications infrastructure. The Lordstown facility, originally acquired from Lordstown Motors in 2022, was used for electric vehicle production but will now be retrofitted to build AI servers and other equipment for Stargate AI data centers.

Meanwhile, Foxconn is also building up operations in Houston, Texas, in partnership with Nvidia, to produce AI machines and other data center gear. Progress on the Stargate project has been slowed by factors including U.S. tariff policy and obstacles to building viable financing models. However, SoftBank denies that access to funding is a problem for the Stargate project.

Foxconn is maintaining activities in California and Mexico, serving dozens of clients. Despite the sale of the Lordstown facility, the company remains committed to its global operations. The Ohio complex could become the first manufacturing base linked directly to Stargate, marking a significant milestone in the project's development.

SoftBank purchases Foxconn's Ohio factory for manufacturing Stargate AI servers, reportedly sealing a $375 million deal, with Foxconn expected to keep running the facility's operations.