SoftBank has fully completed its commitment to invest $40 billion in OpenAI. Last week, the Japanese company sent approximately $22.5 billion to the ChatGPT creator.
This was reported by CNBC, citing anonymous sources. The completion of this deal brings SoftBank’s stake in OpenAI to over 10 percent. It is one of the most ambitious investments by founder Masayoshi Son, who wants to firmly anchor his company in the AI industry.
For this round, SoftBank sold its entire stake in Nvidia and a large portion of its T-Mobile shares. Techzine previously reported that the company rapidly raised capital through these strategic sales. It also cut costs and staff internally.
Phased payment
The financing was transferred in several rounds. In February, SoftBank finalized the terms for a total investment of $40 billion at a valuation of $260 billion. Sources reported at the time that the payment would be spread over 12 to 24 months. It now appears that this has been shortened to approximately 10 months.
Of the total amount, SoftBank had already raised $10 billion from external parties and invested $8 billion itself. Last week’s final tranche completes the package. Part of the money will support the Stargate project, the joint AI infrastructure initiative of OpenAI, Oracle, and SoftBank.
Growing market
OpenAI desperately needs the capital. The company is struggling with high operating costs for training and running its AI models. At the same time, competition is increasing from parties such as Meta and Google, which are developing similar technology. According to CEO Sam Altman, his company has already signaled “code red” several times, just as Google once did when OpenAI first came up with ChatGPT.
In addition, there are currently rumors that Amazon is in talks about a $10 billion investment. If that deal goes through, OpenAI’s valuation would exceed half a trillion dollars. For SoftBank, that would mean a substantial paper profit on its current investment.