SoftBank (Tokyo Stock Exchange Prime Market: 9984) is reportedly nearing a $40 billion investment in OpenAI, valuing the artificial intelligence company at $260 billion pre-money. Sources familiar with the deal told CNBC that the investment could finalize soon.
The funding would be disbursed over 12 to 24 months, with the initial payment expected as early as this spring. This investment would position SoftBank as OpenAI’s largest backer, surpassing Microsoft. While the investment round initially anticipated a $340 billion valuation for OpenAI, a source indicated the final amount would likely be closer to $300 billion.
A portion of the investment is earmarked for OpenAI’s involvement in Stargate, a joint venture with SoftBank and Oracle (NYSE: ORCL) that aims to develop U.S. AI infrastructure. The Stargate project was initially announced by President Donald Trump.
Since launching its ChatGPT chatbot in late 2022, OpenAI has been a frontrunner in the generative AI market. The company faces competition from tech giants like Microsoft, Google, Amazon, Meta, and Anthropic, as well as Elon Musk’s xAI. The generative AI market is projected to exceed $1 trillion in revenue within the next decade.
In related moves, SoftBank has committed to spending $3 billion annually on OpenAI’s technology for its internal use and subsidiaries. Additionally, SoftBank and OpenAI are launching “SB OpenAI Japan” to market OpenAI’s enterprise solutions to Japanese businesses.
OpenAI recently introduced ChatGPT Gov, a specialized AI platform for the U.S. government, emphasizing enhanced security features. This platform enables government agencies to process sensitive information within secure hosting environments.
This investment occurs amidst rising competition from Chinese AI firm DeepSeek, whose R1 model has gained traction for its cost-effectiveness. Sam Altman, OpenAI’s CEO, has acknowledged DeepSeek’s competitive advancements.
