SoftBank is reportedly in negotiations to invest up to $25 billion in OpenAI, making it the leading investor in the artificial intelligence company. This comes after OpenAI facilitated an employee share sale worth $1.5 billion to SoftBank in November. The deal is still in progress as both companies finalize the terms.
SoftBank is in discussions to invest up to $25 billion in OpenAI, which would make it the leading backer of the artificial intelligence startup, CNBC has confirmed. In November, OpenAI facilitated an employee share sale worth approximately $1.5 billion to SoftBank. The deal, however, remains unfinalized, according to a source privy to the negotiations who requested anonymity due to the confidential nature of the discussions. In November, OpenAI allowed its employees to sell around $1.
5 billion worth of shares through a tender offer to SoftBank, as reported by individuals familiar with the situation. A source revealed that SoftBank founder Masayoshi Son persistently sought a larger stake in the company after contributing $500 million to OpenAI's previous funding round. The planned investment seeks to allocate billions of dollars towards the development of U.S. artificial intelligence infrastructure. Founded in 2015 as a non-profit organization, OpenAI is in the process of establishing a public benefit corporation to manage its commercial operations. This restructuring aims to alleviate some of the non-profit constraints and enable OpenAI to operate more akin to a high-growth startup. This shift necessitates increased capital and computational resources to effectively compete in the rapidly evolving generative AI landscape, a market projected to reach $1 trillion within a decade, according to industry analysts. 'The hundreds of billions of dollars that major companies are now investing in AI development demonstrate the magnitude of resources required for OpenAI to continue advancing its mission,' OpenAI's board stated in a blog post last month. OpenAI has been privately valued at $157 billion. In late 2022, the company launched its ChatGPT chatbot, igniting the surge in interest surrounding generative AI. Meanwhile, a Chinese competitor is gaining traction in the U.S. market. DeepSeek, an AI startup lab based in China, witnessed its app's App Store rankings surge this week, causing turmoil in U.S. markets due to reports that its powerful AI model was trained at a significantly lower cost compared to its U.S. counterparts
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