SoftBank Group, a Japanese multinational conglomerate, is in active discussions to invest as much as an additional $30 billion into OpenAI, the cutting-edge artificial intelligence firm famed for its development of ChatGPT technology. This move emerges as OpenAI aims to raise close to $100 billion in fresh capital to accelerate the advancement of its AI models, sustain its extensive computational expenses, and secure its place as a leader in AI talent acquisition. The talks signal SoftBank's intent to broaden its ownership stake and deepen its involvement in the burgeoning AI sector.
According to individuals familiar with SoftBank's plans, the company has emerged as one of OpenAI’s primary shareholders, currently holding an approximately 11% stake following its last sizeable investment round of $22.5 billion completed recently. This strategic positioning within one of the world's foremost AI enterprises reflects SoftBank's broader effort to pivot its investment focus towards artificial intelligence, recognizing the technology's transformative potential across multiple sectors.
SoftBank's increased commitment to OpenAI is underscored by several strategic financial decisions the conglomerate has undertaken to allocate capital towards this high-growth AI investment. Last November, SoftBank divested its shares in technology firms Nvidia Corporation and T-Mobile US Incorporated, moves reflecting a reallocation of resources explicitly aimed at funding AI ambitions. In addition, the company has scaled down activities within its Vision Fund, a technology-focused venture investment vehicle, while implementing stricter capital allocation policies across its portfolio.
Further indicating the focus shift, SoftBank reportedly paused negotiations to acquire Switch Inc., a U.S.-based data center operator, signaling a prioritization of investments directly related to artificial intelligence advancements over expansion in infrastructure sectors.
The CEO of OpenAI, Sam Altman, has outlined the company’s need for significant capital to maintain momentum in developing next-generation AI models and meeting the soaring computational demand required for such work. There is also increasing competition in attracting and retaining top AI professionals, necessitating substantial financial backing.
Alongside SoftBank’s potential investment, OpenAI is exploring multiple avenues to secure funding, including soliciting investments from Middle Eastern sovereign wealth funds and other venture capital entities. The collective capital-raising initiatives could peg OpenAI's valuation near an impressive $830 billion if the funding round materializes as anticipated.
Despite the growth trajectory signaling aggressive expansion in AI capabilities, OpenAI is concurrently planning a considerable slowdown in hiring. This strategic personnel decision aligns with anticipated AI-driven enhancements in productivity, enabling the company to achieve greater output with smaller teams, reflecting efficiencies gained through the technology they develop.
SoftBank’s Tokyo Stock Exchange-listed shares responded positively to news of the prospective OpenAI investment, initially surging by over 8%, before moderating to a gain of approximately 3.7% by Wednesday afternoon. Neither SoftBank nor OpenAI have publicly commented on the investment discussions despite market speculation.
The considerations around this capital infusion highlight a period of transition for both companies: SoftBank redefining its investment landscape in favor of AI-centric projects, and OpenAI poised to expand its financial foundation substantially to maintain technological leadership while adapting operational strategies in response to AI’s evolving capabilities.