SoftBank and OpenAI Partners to Invest up to $25 billion in OpenAI

According to reports, SoftBank, a Japanese investment organization, is in negotiations to become the largest financial supporter of the startup that created ChatGPT by investing up to $25 billion (£20 billion) in OpenAI.

According to CNBC, SoftBank is in negotiations to invest up to $25 billion in OpenAI, making it the company’s largest supporter.

According to an individual with knowledge of the situation who wished to remain anonymous due to the private nature of the discussions, the agreement has not yet been formalized. SoftBank’s possible investment was initially reported by the Financial Times.

According to persons familiar with the situation, OpenAI let its staff sell around $1.5 billion worth of shares to SoftBank in a tender offer in November, as reported by CNBC at the time. According to one source, despite contributing $500 million to OpenAI’s most recent fundraising round, SoftBank founder Masayoshi Son persisted in demanding a bigger share in the company. 

According to the Financial Times, the lender is thinking of investing $15 billion to $25 billion in the San Francisco-based business.

SoftBank is already an investor in OpenAI and recently supported a fundraising round that valued the firm at $157 billion. SoftBank’s other interests include the British chip manufacturer Arm and the parent company of TikTok, ByteDance. Microsoft, OpenAI’s largest shareholder at the moment, also participated in that round.

Stargate, which Donald Trump referred to as “the largest AI infrastructure project in history,” was formed last week by OpenAI, SoftBank, and Oracle. With an initial investment of $100 billion, the alliance seeks to construct data centres for AI systems.

The FT said that SoftBank’s stock investment would pay for the Japanese company’s commitment to Stargate, citing several people with knowledge of the discussions. The richest man in the world and a key player in the Trump administration, Elon Musk, has asserted that Stargate’s supporters “don’t actually have the money.”

The rise of the Chinese competitor DeepSeek this month dealt OpenAI a competitive shock as its most recent chatbot surged to the top of the Apple free app store and caused AI-related stocks to plummet on Monday.

The business later claimed to have proof that Chinese entrepreneurs were “constantly” utilizing OpenAI’s technology to create rival products, despite Altman’s earlier statements that he was thrilled with DeepSeek and that it was “legitimately invigorating to have a new competitor.”

According to the FT, key executives and the OpenAI board have reviewed the company’s equity investment proposal, which is headed by Masayoshi Son, the CEO of SoftBank. It hasn’t been finalized, though.

Microsoft has been OpenAI’s primary backer up to this point, and the company is shifting toward a for-profit model. OpenAI was established in 2015 as a charity, but in order to manage its commercial activities, it is forming a public benefit company. This will allow it to operate more like a high-growth business and remove some of its nonprofit constraints. This implies that in order to participate in the generative AI arms race, which some predict might exceed $1 trillion in ten years, it needs more money and computing power.

The board of OpenAI noted in a blog post last month that “the hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission.”

The private investors have valued OpenAI at $157 billion. The business started the generative AI boom with the release of its ChatGPT chatbot in late 2022. In October, OpenAI concluded its most recent $6.6 billion financing, preparing to take against Microsoft, Google, Amazon, Anthropic, and Elon Musk’s xAI.

In the meantime, a Chinese competitor is booming in the United States. Chinese AI startup lab DeepSeek’s software shot to the top of Apple’s software Store rankings this week, and news that its potent model was trained for a fraction of the price of its American rivals rocked U.S. markets.

Sam Altman, the CEO of OpenAI, called DeepSeek’s R1 model “impressive” and stated on X that “it’s legit invigorating to have a new competitor and we will obviously deliver much better models!”