Japan's SoftBank Plans Up to $25 Billion Investment in OpenAI

SoftBank is currently in discussions to invest as much as $25 billion directly into OpenAI. If successful, this move will make the Japanese technology giant the largest financial supporter of the company that created ChatGPT. This news was initially reported by the Financial Times on Wednesday evening.

If this investment goes through, it would surpass Microsoft's previous stake in OpenAI, which amounts to $13 billion, and represent SoftBank's most significant bet on artificial intelligence to date.

Details about the potential deal emerged following a week filled with substantial changes within the artificial intelligence landscape. Recently, SoftBank committed approximately $15 billion toward the Stargate project, a massive data center initiative valued at $500 billion. This project involves collaborations with OpenAI, Oracle, and investment firm MGX.

The Stargate project received attention when U.S. President Donald Trump announced it, claiming it would generate over 100,000 jobs for Americans and would include the establishment of data centers in Texas. Masayoshi Son, SoftBank's CEO, has been appointed as the chairman of the Stargate project.

Transforming AI Investments

The considerable capital investment indicates a strategic shift for OpenAI as it aims to lessen its reliance on Microsoft's computing systems. As part of the Stargate agreement, Microsoft will no longer hold the exclusive rights as OpenAI's cloud provider, thus allowing opportunities for collaborations with companies such as Oracle.

While the negotiations are still “ongoing”, the total amount of SoftBank's main equity investments into OpenAI is described as “a moving target”. Reports suggest that combined investments may eventually exceed $40 billion.

About 20% of Stargate’s funding is expected to come from equity investments, with the rest being financed through debt secured against its assets and anticipated future cash inflows. This kind of funding approach is characteristic of traditional infrastructure financing but is unprecedented in the tech sector.

For Masayoshi Son, this investment aligns with his vision of advancing technology towards achieving “super-intelligence” — a form of technology that exceeds human cognitive capabilities. Reports indicate that Son has spent years fostering a relationship with OpenAI CEO Sam Altman, considering their partnership vital in establishing dominance in future AI infrastructure.

The timing of these discussions is critical as OpenAI's board is working towards transitioning the company into a for-profit entity that also serves public benefits. To facilitate this transformation, OpenAI has engaged Goldman Sachs CEO David Solomon and advisory firm M. Klein & Co, and has secured legal counsel from Wachtell Lipton’s Andy Nussbaum.

OpenAI's valuation reached $157 billion last year after raising around $20 billion through various funding rounds, which included an earlier $2 billion investment from SoftBank.

Rethinking AI Initiatives

The transition efforts and expansions among major artificial intelligence firms come in the wake of Chinese company DeepSeek making headlines by proving that advanced AI models can be developed on relatively modest budgets. Jack Tan, co-founder of crypto exchange WOO X, stated that key factors contributing to sustained leadership in AI will include proprietary data and practical applications, favoring organizations with the capacity to scale AI technologies across various sectors.

Tan highlighted that the arrival of DeepSeek has raised questions about the necessity of Stargate's extensive computational resources, suggesting that smaller operations could diminish the dependency on such infrastructure.

However, the SoftBank-OpenAI deal, which is structured heavily around debt (approximately 80%), draws parallels to SoftBank’s notable investment in WeWork. If finalized, this investment would significantly exceed SoftBank's controversial $16 billion stake in WeWork.

Both OpenAI and SoftBank have not yet responded to requests for comments regarding the ongoing negotiations.

Conclusion

This investment represents a potentially transformative moment for both SoftBank and OpenAI, positioning them strategically within the rapidly evolving AI landscape.

SoftBank, OpenAI, Investment