OpenAI is in talks to secure up to $40 billion in funding, potentially raising its valuation to $340 billion. Reports suggest SoftBank may invest $15-25 billion, becoming the largest investor in OpenAI. Both companies are part of the Stargate initiative, a $500 billion project aimed at enhancing AI infrastructure in the U.S. Despite market fluctuations following concerns over a new AI competitor, SoftBank’s CEO, Masayoshi Son, remains focused on AI investments.
OpenAI’s Ambitious Funding Goals
In a significant move, OpenAI is reportedly negotiating to secure up to $40 billion in a new funding round, which would elevate the valuation of the renowned artificial intelligence firm and the creator of ChatGPT to an impressive $340 billion, as highlighted in a recent article by the Wall Street Journal.
Previous reports from both the Wall Street Journal and the Financial Times indicate that SoftBank Group, a prominent Japanese technology investment leader, may inject between $15 billion and $25 billion into OpenAI. If this investment materializes, it could position SoftBank as the principal investor in the American startup, surpassing Microsoft, which has already invested nearly $14 billion in OpenAI over the past few years.
Stargate Initiative and Market Reactions
Both OpenAI and SoftBank are key players in the ‘Stargate’ initiative, a substantial investment project aimed at enhancing AI infrastructure in the United States. Announced recently by President Donald Trump, the initiative is designed to funnel a total of $500 billion over the next four years into this transformative sector.
OpenAI has already made headlines by completing a significant fundraising round of $6.6 billion earlier this month, which valued the company at $157 billion. Reports suggest that SoftBank’s proposed investment would complement its existing commitment of over $15 billion to the Stargate project. Furthermore, OpenAI is also pledging $15 billion to this initiative, making the potential collaboration between SoftBank and OpenAI crucial for its success.
In the stock market, SoftBank Group experienced a slight decline of 0.84% on the Tokyo Stock Exchange, contrasting with an overall market increase of 0.28%. This comes in the wake of concerns raised by a new conversational AI robot developed by the Chinese startup DeepSeek, which has spurred anxiety among investors in Silicon Valley and caused a dip in technology stocks on Wall Street.
Masayoshi Son, the dynamic founder and CEO of SoftBank, is known for his bold investment strategies, having made significant gains with ventures like Yahoo! and Alibaba in the 1990s. However, some of his other investments have faced challenges. Recently, Son has turned his focus towards artificial intelligence, particularly with Arm, a British chip design company predominantly owned by SoftBank and integral to the smartphone industry.
The Stargate project is not only backed by OpenAI and SoftBank but also involves Oracle, a leader in cloud computing, and the UAE-backed investment fund MGX. Notably, Elon Musk, the CEO of Tesla and appointed leader of an extra-governmental mission by Trump, has publicly criticized the Stargate initiative, claiming that its participants may lack sufficient funding, a statement that Sam Altman, the head of OpenAI, quickly refuted.
As analysts speculate whether SoftBank will consider reducing its stake in Arm to facilitate funding for Stargate, the developments surrounding OpenAI and its partnerships remain crucial in the rapidly evolving landscape of artificial intelligence investment.