SoftBank in talks to invest up to $25 billion into OpenAI, says source ...
SoftBank is reportedly in discussions to invest up to $25 billion in OpenAI, the owner of ChatGPT, as part of its strategic expansion initiatives in the tech sector. The Japanese conglomerate is considering a direct investment ranging from $15 billion to $25 billion into OpenAI, with a portion of the funds potentially allocated towards fulfilling OpenAI's commitment to Stargate, a joint initiative involving Oracle and SoftBank.
Stargate Project and AI Race
Stargate, a collaboration between Oracle, OpenAI, and SoftBank, aims to invest up to $500 billion to ensure the United States maintains a competitive edge in artificial intelligence against global competitors such as China. This prospective investment by SoftBank would supplement the $15 billion it has already pledged to the Stargate project, although discussions are said to be in the early stages.
The Financial Times recently reported on the latest investment talks involving OpenAI, while The Information had previously suggested SoftBank's plans to invest a total of $40 billion in Stargate and OpenAI. To fund this endeavor, SoftBank has initiated talks to secure financing of up to $18.5 billion, leveraging its publicly-listed assets.
Market Developments and Challenges
Following the announcement of the Stargate venture at the White House by key figures including U.S. President Donald Trump, SoftBank CEO Masayoshi Son, OpenAI CEO Sam Altman, and Oracle Chairman Larry Ellison, the market saw disruptions caused by DeepSeek, a Chinese startup. DeepSeek introduced a cost-effective artificial intelligence assistant developed using budget-friendly chips and less data compared to U.S. counterparts, leading to a significant impact on SoftBank's stock performance.
Despite an initial surge in share price post-Stargate unveiling, SoftBank experienced a 12% decline amidst the DeepSeek-induced market turbulence. With ongoing talks and plans to secure a substantial stake in OpenAI, CEO Son's commitments to Stargate have been reviewed and approved by senior executives and the board at OpenAI, according to reports.
Company Valuation and Responses
Last year, SoftBank made a noteworthy $1.5 billion investment in OpenAI, contributing to the company's valuation of $157 billion in its recent funding round. This valuation solidifies OpenAI's position as one of the most valuable private entities globally. Both OpenAI and SoftBank have refrained from offering comments in response to queries from Reuters.
