San Francisco, USA – OpenAI is reportedly in discussions to raise $40 billion in a new funding round, potentially doubling its valuation to $430 billion, according to The Wall Street Journal.
SoftBank Leads the Investment
Japan’s SoftBank is expected to contribute between $15 billion and $25 billion, making it the largest investor in OpenAI. The deal could push SoftBank’s total AI investments past $40 billion. This investment comes amid rising competition from Chinese AI startup DeepSeek, which recently introduced an advanced chatbot at a lower cost than its American competitors.
Significance of the Investment
- Unprecedented Growth: OpenAI was valued at $157 billion just three months ago. If successful, this new funding round would represent one of the largest and fastest valuation increases in Silicon Valley history.
- AI Infrastructure Investment: The funds will support OpenAI in building advanced AI models and computing infrastructure, which require significant capital investment.
Ties to the US AI Strategy and Stargate Initiative
- Stargate Initiative: OpenAI has committed $18 billion to the $500 billion Stargate AI project, led by President Donald Trump, to strengthen AI infrastructure in the United States.
- SoftBank has already pledged over $15 billion to Stargate, with potential plans to increase its total investment significantly.
Market Reactions and Industry Response
- SoftBank shares rose 3% in Tokyo trading following the news.
- Elon Musk’s Criticism:
- Musk dismissed Stargate’s funding plans, claiming its backers “don’t actually have the money.”
- OpenAI CEO Sam Altman refuted Musk’s claims, calling them inaccurate.
- Musk, an early investor in OpenAI, has had ongoing disputes with Altman over AI safety and commercialization.
The Broader Implications
As AI development becomes increasingly expensive, major technology firms and investors are allocating substantial financial resources to maintain leadership in the sector. OpenAI’s success in securing this funding could further establish its dominance, though increasing competition from China and other AI firms will continue to present challenges.