SoftBank is currently in discussions to invest a substantial amount, potentially up to $25 billion, in OpenAI. This investment is part of a larger partnership that could see the Japanese conglomerate allocate over $40 billion towards AI initiatives with the support of the Microsoft-backed startup, as reported by the Financial Times.
If the deal goes through, SoftBank would become OpenAI’s largest single backer, surpassing Microsoft, who initially invested in the ChatGPT creator back in 2019. The collaboration between the two companies was further solidified last week with the announcement of a joint investment of $100 billion in Stargate, a U.S. data center project by OpenAI that has the potential to grow to $500 billion over a four-year period.
According to the report, SoftBank is planning to directly invest $15 billion to $25 billion in OpenAI, in addition to their $15 billion commitment to Stargate. OpenAI, on the other hand, is expected to invest around $15 billion in Stargate, with the possibility of SoftBank’s equity investment covering OpenAI’s infrastructure obligations.
The discussions between SoftBank and OpenAI come at a time when the release of DeepSeek’s R1 “reasoning” model, developed on a modest budget, has caused turbulence in the market. This development has raised concerns among investors about the necessity of significant investments in expensive AI hardware if similar results can be achieved with fewer resources.
OpenAI recently alleged that DeepSeek used its proprietary models to train R1 and other models through “distillation,” a technique that enables developers to achieve comparable performance with smaller models at a lower cost. OpenAI claims that such actions violate its terms of service, which prohibit the use of outputs to create competing models.
The potential deal between OpenAI and SoftBank, though not yet finalized as per the Financial Times, marks SoftBank founder Masayoshi Son’s most significant investment since injecting $16 billion into WeWork. This partnership would also lessen OpenAI’s reliance on Microsoft for computing resources, as Microsoft has recently agreed to relinquish its exclusive cloud provider status for OpenAI.
It is anticipated that around 20% of Stargate’s funding will come from equity, with the remaining portion financed through debt secured against assets and cash flow. OpenAI, which achieved a valuation of $157 billion last year, is also in discussions to transition into a for-profit entity to facilitate additional fundraising opportunities.
