- SoftBank is set to invest $40 billion in OpenAI, valuing the AI company at $260 billion pre-money, potentially elevating its post-money valuation to $300 billion, making SoftBank the largest investor over Microsoft.
- The investment will partly fund OpenAI’s commitment to Stargate, a joint venture with SoftBank and Oracle to bolster U.S. AI infrastructure, announced by President Donald Trump, amidst OpenAI’s strategic moves to align with government initiatives.
- This investment comes as OpenAI faces competition from Chinese AI firm DeepSeek, whose cost-effective AI model has made significant market impact, prompting OpenAI to enhance its technology amidst a rapidly growing AI market projected to exceed $1 trillion in revenue.
In a significant development for the AI industry, SoftBank is nearing the completion of a massive $40 billion investment in OpenAI, valuing the company at $260 billion pre-money, which would increase to $300 billion post-money once the investment is fully disbursed over the next 12 to 24 months. This move, as reported by CNBC, would position SoftBank as the largest investor in OpenAI, overtaking Microsoft, with the initial funding expected to be released as soon as this spring. The publication notes that part of this investment is anticipated to support OpenAI’s commitment to Stargate, a joint venture with SoftBank and Oracle (ORCL) aimed at enhancing U.S. AI infrastructure, as announced by President Donald Trump.
OpenAI, which burst onto the scene with its ChatGPT chatbot in late 2022, has been at the forefront of the generative AI race, competing against tech giants like Microsoft (MSFT), Google (GOOG, GOOGL), and Amazon (AMZN), as well as newer entrants like Elon Musk’s xAI and Anthropic. The influx of capital from SoftBank follows a series of strategic moves by OpenAI, including the launch of ChatGPT Gov, tailored specifically for U.S. government use, offering enhanced security and the ability to handle sensitive information within secure environments. This governmental focus coincides with efforts by OpenAI’s CEO, Sam Altman, to align closely with political figures, evidenced by his contributions to Trump’s inauguration and his public expressions of support for the president.
This investment round is particularly timely as it comes on the heels of competitive pressure from Chinese AI startup DeepSeek, whose cost-effective AI open-source model, R1, has rapidly gained traction in the U.S. market. Altman has acknowledged DeepSeek’s competitive edge, viewing it as a motivator for OpenAI to enhance its offerings. Additionally, SoftBank’s commitment to spend $3 billion annually on OpenAI’s technology, alongside the establishment of “SB OpenAI Japan” to market AI solutions to Japanese enterprises, underscores the global ambition of both companies to lead in the AI sector. With the AI market projected to reach over $1 trillion in revenue within a decade, this investment not only signifies confidence in OpenAI’s capabilities but also highlights the escalating global race in AI technology development and application.
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