OpenAI’s $40 billion funding round cements its place among the world’s most valuable private companies
SoftBank and Microsoft back AI powerhouse as competition in artificial intelligence heats up.
OpenAI announced on Monday that it plans to raise up to $40 billion in a new funding round led by SoftBank Group at a valuation of $300 billion. The investment aims to advance AI research, expand computational infrastructure, and enhance OpenAI's suite of tools.
The Japanese tech investment giant stated that it has agreed to provide OpenAI with an initial $10 billion in mid-April, followed by an additional $30 billion in December, contingent on OpenAI transitioning to a for-profit structure by the end of the year.
SoftBank intends to syndicate $10 billion of its total investment to co-investors, though it has not disclosed their names. A source familiar with the matter told Reuters that the remaining funds would come from Microsoft, Coatue Management, Altimeter Capital, and Thrive Capital.
If OpenAI’s restructuring does not proceed as planned, SoftBank said its total investment in the round would be reduced to $20 billion.
OpenAI, which has rapidly scaled its AI capabilities, stated that it aims to develop increasingly powerful tools for the 500 million people who use ChatGPT every week.
Investor enthusiasm for artificial intelligence has surged in recent years, fueled by the widespread adoption of AI-driven chatbots and advanced machine-learning models. Enterprises are integrating AI solutions to optimize operations and improve customer engagement, while venture capital firms compete to back the most promising startups in the space.
San Francisco-based OpenAI previously closed a $6.6 billion funding round in October, valuing the company at $157 billion. The new funding round would nearly double OpenAI’s valuation, positioning it among the world's most valuable private technology firms.
"OpenAI has very ambitious plans on multiple fronts and requires significant capital to achieve them," said Gil Luria, an analyst at D.A. Davidson & Co. "The list of investors willing to support such an expansive vision is shrinking and may be largely limited to SoftBank, which itself may not have the necessary capital."
SoftBank plans to finance the initial $10 billion through borrowings from Mizuho Bank and other financial institutions.
Additionally, OpenAI is partnering with SoftBank and Oracle to develop a network of data centers under the $500-billion Stargate project, designed to power AI workloads across the United States.
Microsoft-backed OpenAI also announced plans to restructure its corporate framework, creating a public benefit corporation to attract further investment while balancing shareholder interests with public good.
With this latest funding round, OpenAI will join the ranks of the world's most valuable private companies, alongside SpaceX, China’s ByteDance, and Stripe.
Earlier Monday, OpenAI CEO Sam Altman announced that ChatGPT added "one million users in the last hour," indicating a significant acceleration in its adoption. Additionally, Altman revealed plans for OpenAI to release its first open-weight language model with reasoning capabilities since GPT-2 in the coming months. To gather feedback, OpenAI will host developer events starting in San Francisco and extending to Europe and the Asia-Pacific regions.
