Japanese investment conglomerate SoftBank (SFTBY) intends to invest up to $40 billion in OpenAI, leaving another initial backer, Microsoft (MSFT), behind. If accomplished, this would be one of the largest investments to date in a private company. The Masayoshi Son-led firm is said to be leading the latest funding round, valuing the ChatGPT maker at a whopping $300 billion (up from the previous valuation of $157 billion). This also marks one of the largest valuations for a private company so far.
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Some sources state that SoftBank would invest roughly $15 to $25 billion directly into OpenAI, and the rest would go toward the latter’s commitment to Stargate. According to filings, SoftBank is said to have roughly $30 billion in cash on hand. However, this commitment is expected to come in the form of convertible notes, similar to the earlier round. The investment is also subject to OpenAI converting its business model into a for-profit organization.
AI Bets Are Becoming Larger Than Life
SoftBank, which is known for making drastic bets on the tech sector, is once again making a large bet on the generative AI space. SoftBank had invested in the Sam Altman-led firm in the earlier round. Earlier yesterday, reports suggested that SoftBank could invest up to $25 billion in OpenAI, but as the day progressed, stakes became larger, and so did SoftBank’s investment.
The launch of a cheaper model by Chinese AI (artificial intelligence) startup DeepSeek has put American players in a tight spot. A majority of tech companies have planned to invest additional billions of dollars this year into AI infrastructure and data center projects. In the meantime, DeepSeek has been able to make a comparative generative AI model in less time and at a lower cost.
Despite the current DeepSeek frenzy, tech companies are not worried about their massive capex plans. For instance, Meta Platforms (META) CEO Mark Zuckerberg defended Meta’s massive AI spending, citing that these investments are necessary and will place the company in an advantageous position in the long run.
Microsoft’s Absence Remains Obscure
Until now, Microsoft boasted of being the largest backer of OpenAI, having invested billions of dollars in the AI firm. The tech giant also owns some potential 49% stake in OpenAI, once certain conditions are fulfilled. Why Microsoft remains absent from the latest funding round remains obscure, as none of the companies have officially issued a statement on the potential funding.
Who Is the Biggest Investor in OpenAI?
So far, Microsoft and SoftBank have emerged as the two largest investors in OpenAI. We used the TipRanks Stock Comparison tool to compare their performance. Investors who seek to gain exposure to OpenAI can do so by investing in one of these companies after thorough research.
