SoftBank is reportedly finalizing a substantial $40 billion primary investment in OpenAI, pricing the artificial intelligence startup at a pre-money valuation of $260 billion. According to sources cited by CNBC, the investment is expected to be disbursed over the next 12 to 24 months, with the initial payment possibly arriving as early as this spring, leading to a post-money valuation of $300 billion for OpenAI.
Additionally, SoftBank could syndicate up to $10 billion of that total. With this new influx of capital, SoftBank is poised to surpass Microsoft as the largest investor in the AI startup. In October, OpenAI was last valued by private investors at $157 billion. While initial expectations were that this funding round would bring OpenAI’s valuation to $340 billion, a source later told CNBC that the figure would likely be closer to $300 billion.
Strategic shift in AI alliances
SoftBank’s growing presence in OpenAI is reshaping the AI funding landscape, especially given Microsoft’s historic role as the company’s most influential partner. OpenAI’s reliance on Azure cloud services has been a key driver of its growth, but the new funding allows OpenAI to diversify its computing infrastructure. The investment signals OpenAI’s growing independence. The funding is expected to fuel OpenAI’s expansion beyond Microsoft Azure and accelerate the Stargate project , a large-scale AI infrastructure initiative backed by SoftBank, Oracle and the U.S. government.
Stargate Project and AI Infrastructure
Part of the investment is expected to support OpenAI’s involvement in Stargate, a collaborative initiative between SoftBank, OpenAI, and Oracle that was unveiled in January. The venture aims to funnel billions into improving AI infrastructure in the United States. Some of the funds from the deal will go to Stargate, the $500 billion joint venture that will create new AI infrastructure in the United States. SoftBank CEO Masayoshi Son is already set to become the organization’s chairman.
OpenAI's Market Position
OpenAI, which made waves in late 2022 with the launch of its chatbot ChatGPT, has sparked fierce competition in the generative AI space. Since then, the company has been actively battling major players such as Elon Musk’s xAI, Microsoft, Google, Amazon, Meta, and Anthropic. The generative AI market is expected to surpass $1 trillion in revenue in the next decade.
The deal positions OpenAI as the world’s most valuable AI startup and gives SoftBank a central role in the future of artificial intelligence. If the current talks go through, OpenAI could surpass some of the world’s most valuable startups. Currently, TikTok’s parent company ByteDance holds the top spot with a valuation of around $225 billion, followed by SpaceX at around $200 billion.
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