In a new development for the artificial intelligence (AI) field, SoftBank Group Corp. is poised to invest $500 million into OpenAI, the company behind the groundbreaking ChatGPT, The Information reports.
This investment, part of a larger funding round, is expected to boost OpenAI’s valuation to $150 billion, according to a source cited by the publication, further solidifying its position as a leader in the AI industry.
The funding round, rumored to be in the works for months, is anticipated to close within a week and could reach up to $6.5 billion. This influx of capital will likely come in the form of convertible notes, the report noted, offering investors the potential to convert their debt into equity down the line.
SoftBank’s involvement opens up intriguing possibilities for collaboration between the two tech powerhouses. With SoftBank’s majority stake in Arm Holdings (ARM) and recent acquisition of chip startup Graphcore, there’s potential for synergy in the development of AI processors. This aligns well with OpenAI’s reported interest in partnering with a chipmaker to design custom AI accelerators for its machine learning clusters.
The funding round is expected to attract other heavyweight investors, including Microsoft Corp. (MSFT), which has already poured billions into OpenAI. Tiger Global, Coatue, and Thrive Capital are also rumored to be participating, with Thrive potentially taking the lead by investing over $1 billion. Notably, Nvidia Corp.(NVDA) might join the fray, while Apple Inc. (AAPL) has reportedly decided to bow out of the investment opportunity.
OpenAI’s meteoric rise shows no signs of slowing down. The company projects its revenue to skyrocket from $3.7 billion this year to an astonishing $100 billion by 2029. To accommodate this growth and the influx of new investors, OpenAI is reportedly considering restructuring its for-profit arm as a benefit corporation and removing caps on investor returns.
This massive funding round comes at a time when demand for OpenAI’s models is surging. The company’s innovative AI solutions have captured the imagination of industries worldwide, promising to revolutionize everything from customer service to content creation.
With this fresh injection of capital and the backing of tech giants, OpenAI is poised to push the boundaries of artificial intelligence even further, potentially ushering in a new era of technological advancement that could reshape our world in ways we’ve only begun to imagine.
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