OpenAI plans to raise up to $40 billion in a new funding round led by SoftBank Group, which would value the company at $300 billion. The investment aims to advance AI research, expand computational infrastructure, and enhance its tools.
SoftBank has committed to funding OpenAI with $10 billion in mid-April, followed by another $30 billion in December, contingent upon OpenAI transitioning to for-profit status by year's end. The investment group intends to syndicate $10 billion of its total investment to unnamed co-investors. Additional funding is expected to come from Microsoft, Coatue Management, Altimeter Capital, and Thrive Capital.
Should OpenAI's restructuring not proceed as planned, SoftBank indicated that its total investment would drop to $20 billion.
OpenAI aims to deliver increasingly powerful tools to the 500 million people who use ChatGPT weekly. Investor interest in the artificial intelligence sector has surged, fueled by the rise of chatbots and advanced AI agents. Many enterprises are incorporating AI solutions to improve operations and customer experiences, leading venture capital firms to compete for promising AI startups.
In a previous funding round in October, OpenAI was valued at $157 billion, and this new round could nearly double that valuation. Analyst Gil Luria from D.A. Davidson & Co remarked on OpenAI's ambitious plans, emphasizing the need for substantial capital to achieve its goals and noting that investor interest has become more limited, particularly for SoftBank.
SoftBank plans to finance the initial $10 billion through loans from Mizuho Bank and other financial institutions. It is also collaborating with SoftBank and Oracle to develop a network of data centers as part of the $500 billion Stargate project, aimed at powering AI workloads in the U.S.
Masayoshi Son, chairman and CEO of SoftBank Group, stated, "AI is a defining force shaping humanity's future. Our expanded partnership with OpenAI accelerates our shared vision to unlock its full potential."
Additionally, OpenAI intends to become a public benefit corporation to attract more investment and resources while balancing the interests of shareholders with public benefits. With this latest funding, OpenAI will join esteemed private companies like SpaceX, ByteDance, and Stripe.
U.S. law firm Morrison Foerster is advising SoftBank on this venture.