In a landmark move signaling immense confidence in the future of artificial intelligence, Japanese telecoms giant SoftBank, along with a consortium of investors, has announced a staggering $40 billion funding round for OpenAI, the creator of ChatGPT. This infusion of capital positions OpenAI for unprecedented growth and solidifies its status as a leading force in AI development.
SoftBank’s commitment forms the cornerstone of this substantial investment, pledging an initial $10 billion. The firm has further committed an additional $20 billion, contingent upon OpenAI’s successful transition from a non-profit to a for-profit entity by the end of 2025. Should this transition not materialize, SoftBank’s second investment will be reduced to $10 billion.
The remaining $10 billion is contributed by a group of investors including existing backer Microsoft, and investment firms Coatue Management, Altimeter Capital, and Thrive Capital, as reported by the Financial Times.
This funding round, if fully realized, would propel OpenAI’s valuation to a remarkable $300 billion. To put this into perspective, were OpenAI a publicly traded company, it would rank 28th on the S&P 500, surpassing oil giant Chevron and closely trailing T-Mobile US. This valuation nearly doubles the company’s previous $6.6 billion valuation from October.
“It’s hard to know for sure without getting a look at OpenAI’s books, but, likely, this would also see SoftBank become OpenAI’s biggest single backer, overtaking Microsoft, which has to date backed it to the tune of $13 billion,” I observe.
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This development validates earlier reports from late January, which indicated SoftBank’s interest in investing in OpenAI, albeit with initial estimates significantly lower, at up to $25 billion.
OpenAI has stated that this substantial funding will enable it to “push the frontiers of AI research even further, scale our compute infrastructure, and deliver increasingly powerful tools for the 500 million people who use ChatGPT every week.”
“We’re excited to be working in partnership with SoftBank Group – few companies understand how to scale transformative technology as they do,” OpenAI stated. “Their support will help us continue building AI systems that drive scientific discovery, enable personalised education, enhance human creativity, and pave the way toward AGI (artificial general intelligence) that benefits all of humanity.”
However, OpenAI has also faced criticism. Recent controversies, such as the use of its image-generating technology to mimic Studio Ghibli’s style, have drawn ire from AI art critics, who cite concerns about ethical implications and intellectual property. The resurfacing of Hayao Miyazaki’s 2016 quote, where he expressed his “disgust” with AI art, further underscores these concerns.
Despite these challenges, SoftBank remains steadfast in its commitment to OpenAI’s AGI/ASI mission. Beyond direct investment, SoftBank and OpenAI are founding partners of the Stargate Project, a $500 billion initiative aimed at expanding AI infrastructure in the United States. Furthermore, in February, they announced plans for a joint venture, Cristal Intelligence, focused on serving the Japanese enterprise market.
This significant funding round highlights the growing recognition of AI’s transformative potential and the substantial investments being made to drive its advancement.
