(FORTUNE Magazine) – Floating pierside on the Hudson River, PlayStation shimmers on the edge of plausibility. A $5 million, 105-foot-long, dual-hulled vision of gleaming yellow carbon fiber and Kevlar, the boat embodies the late-1990s fusion of extreme sports and extreme wealth. Last March the catamaran shattered the 24-hour distance record on her first overnight sail; now she's waiting for the winds to pick up so that she can break another record--the transatlantic crossing. Apart from adding a new trophy to owner Steve Fossett's case, the transit will officially qualify PlayStation for the race she was designed to run: a no-holds-barred round-the-world competition, called simply the Race, slated to start Dec. 31, 2000.

Devised by French sailor Bruno Peyron after he set the round-the-world speed record in 1993, the Race is unprecedented in modern racing. With no restrictions on length, displacement, or sail area, it's a new kind of race, contested by a new breed of yachtsman. Gone are the days when America's top sailors learned the ways of the sea within sight of their family "cottages" at Newport, R.I. Today's Uber-salt has made his billions in securities trading (like Fossett) or software and seen his wealth soar in the '90s bull market. The yachts too are creatures of the late '90s, pushing the very concept of "boat" with radically engineered multiple hulls, hydraulic controls, and wing-shaped masts.

Not all of America's A-list billionaires are lining up for the Race, but a good portion of them are putting out to sea in megayachts. Oracle CEO Larry Ellison has been tearing up the blue-water sailing scene in his yacht Sayonara, winning last year's lethal Sydney-to-Hobart race. Ellison took along Lachlan Murdoch as crew, then loaned the boat to Ted Turner to try his luck in the legendarily hazardous Fastnet race.

Fossett is doing his part to spread the gospel, inviting fellow balloonist Richard Branson along as crew on Playstation's transatlantic bid. Silicon Valley guru Jim Clark, meanwhile, spent an estimated $30 million to $50 million building the 155-foot-long Hyperion (which graced FORTUNE's Nov. 23, 1998, cover) before deciding to build a 300-foot juggernaut that makes Hyperion look like a dinghy. "Five years ago there were hardly any boats over 100 feet being built," says the Newport-based yacht designer Ken Takata. "Now the yards have more orders than they can handle."

Once, ballooning drew these alpha males with the lure of the first lighter-than-air circumnavigation. When that milestone fell in March, adventurers were bereft. "That's what I was ballooning for, to make the first round-the-world flight," says Fossett. "So when Piccard and Jones succeeded, that changed things completely for me."

Technology on the new yachts creates possibilities for great achievement, but it can also increase the chances of getting killed. In the battle to minimize weight, designers are always tempted to cut a little closer to the danger zone. "We have a saying," says professional sailor Tony Bessinger: " 'If it doesn't break, we built it too strong.' " The ramifications of that philosophy became clear during last year's Sydney-to-Hobart race, when strong winds and heavy seas sank several boats and killed six sailors.

That race didn't feature nearly as much untested new technology as the Race will. "There's going to be a lot of catastrophic equipment failure in the Race --no question," says Bessinger. "They'll be pulling people out of the water." Fossett himself has already faced death on the high seas. Last August his balloon ruptured and plummeted 29,000 feet into the Coral Sea. "Sailing is a high-risk sport, for sure," he says. "We do have a very high risk of breakage. But Playstation won't sink. If we flip upside down, we just have to live on it until someone can come by and pick us up."

--Jeff Wise