SoftBank's Potential $40 Billion Investment in OpenAI at $300 Billion Valuation

SoftBank Group SFTBF SFTBY is currently engaging in talks to lead a significant funding round for OpenAI, which could see the company raise as much as $40 billion.

What Happened: According to a report by Reuters, this potential investment would elevate the valuation of the creators of ChatGPT to an impressive $300 billion. This would set a new record for funding rounds involving private companies.

Prior to this funding initiative, SoftBank valued OpenAI at $260 billion, which indicates a marked increase from $157 billion just a few months prior.

Additionally, reports from the Wall Street Journal suggest that the valuation of OpenAI could rise to approximately $340 billion following this funding round.

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Why It Matters: Reports indicate that SoftBank may consider investing between $15 billion to $25 billion directly into OpenAI. If this occurs, it would represent a significant investment for SoftBank and its CEO, Masayoshi Son, who is known to have around $30 billion in cash reserves available.

This funding could position SoftBank as a dominant stakeholder in OpenAI, potentially surpassing investments made by Microsoft Corporation MSFT, which has so far invested nearly $14 billion.

This development comes in the wake of activity from DeepSeek, a Chinese startup that has claimed it created a cost-effective R1 model in just two short months with an investment of $5.6 million, utilizing lower-tier Nvidia Corporation NVDA chips.

OpenAI has raised concerns, alleging that DeepSeek has used its proprietary models without permission.

Photo by NP27 on Shutterstock.

Conclusion: The potential funding round led by SoftBank represents a monumental opportunity for OpenAI and a possible seismic shift in its investor landscape, raising the stakes for future developments in advanced AI technologies.

SoftBank, OpenAI, Funding