SoftBank is reportedly in discussions to lead a new funding round for OpenAI, the creator of ChatGPT, at a staggering $300 billion valuation. This potential investment of up to $25 billion would place OpenAI on par with ByteDance, the owner of TikTok, as the second most valuable private company globally, trailing only SpaceX.
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Sam Altman and Masayoshi Son at the White House.
Initially reported by the Financial Times, the ongoing negotiations could significantly impact the artificial intelligence landscape. While the final figures may vary, a successful funding round at the discussed valuation would nearly double OpenAI’s current worth of $157 billion. This surge would position OpenAI among an elite group of companies with centibillion valuations, alongside Stripe and Shein.
OpenAI’s Ascent in the AI Arena
OpenAI’s current standing as the third most valuable private tech company underscores its rapid rise in the AI sector. This potential investment from SoftBank would solidify its position as a dominant force. SpaceX, with a valuation around $350 billion following a recent stock buyback, currently holds the top spot. ByteDance achieved its $300 billion valuation through a similar buyback offer.
Masayoshi Son, founder and CEO of SoftBank.
Prior to these discussions with SoftBank, OpenAI had already secured nearly $20 billion from prominent investors like Thrive Capital, Khosla Ventures, and Nvidia. Should SoftBank commit $15 to $20 billion, it would surpass Microsoft as OpenAI’s largest investor, eclipsing Microsoft’s current investment of approximately $13 billion.
SoftBank’s Ambitious AI Vision
This potential investment aligns with SoftBank founder Masayoshi Son’s vision of an era defined by “artificial super intelligence.” Son, known for his early investment in Alibaba, has been a vocal proponent of AI’s transformative potential, predicting the emergence of AI with intelligence 10,000 times that of humans by the mid-2030s. He has also publicly discussed his frequent use of ChatGPT.
The deal would further strengthen the existing ties between SoftBank and OpenAI, building upon their recent joint venture, Stargate.
The Stargate Project: A Massive Infrastructure Undertaking
Announced at the White House by former President Donald Trump, Stargate aims to invest up to $500 billion in US-based AI infrastructure projects over the next four years. With Son as chairman, this ambitious project includes initial equity funding from Oracle, the UAE’s MGX, SoftBank, and OpenAI.
Graphical representation of the Stargate project.
Stargate plans to immediately deploy $100 billion, according to OpenAI. The source of this substantial capital remains unclear, especially considering OpenAI’s current financial losses. It’s speculated that SoftBank’s potential equity investment could contribute approximately $15 billion to the Stargate initiative.
Conclusion: A Potential Turning Point for the AI Industry
While both SoftBank and OpenAI have declined to comment, the potential investment represents a significant development in the rapidly evolving AI landscape. If realized, this deal could further accelerate OpenAI’s growth trajectory, solidify SoftBank’s position as a leading AI investor, and significantly impact the development and deployment of AI infrastructure globally. The ramifications of this potential partnership could reshape the future of technology and innovation.
