OpenAI is finalizing a landmark $40 billion funding deal spearheaded by SoftBank Group Corp. (TYO: 9984), according to sources familiar with the negotiations, potentially creating the largest private financing round in tech history.
The investment would propel the ChatGPT creator’s valuation to approximately $300 billion, reflecting an extraordinary trajectory for a company that was valued at $157 billion just five months ago when it last raised capital.
The funding structure involves two separate phases, according to Bloomberg which cited people familiar with the matter. An initial round would bring $7.5 billion from SoftBank and $2.5 billion from a group of co-investors. Later this year, a second tranche would deliver an additional $30 billion—with SoftBank contributing $22.5 billion and syndicate partners providing $7.5 billion.
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Also read: OpenAI Signs $11.9 Billion Deal with CoreWeave
TD Cowen analysts noted in a Wednesday research report that the deal coincides with strategic shifts at Microsoft, OpenAI’s major technology partner. Microsoft (Nasdaq: MSFT) has recently modified contractual terms with OpenAI, creating flexibility for the AI firm to utilize cloud services from Microsoft competitors under certain circumstances.
Microsoft has simultaneously overhauled its AI infrastructure strategy. TD Cowen analysts report the tech giant canceled multiple data center expansions across American and European markets that would have added approximately 2 gigawatts of computing capacity.
Despite allocating roughly $80 billion toward AI data centers for the fiscal year ending this June, Microsoft executives have signaled a forthcoming deceleration in infrastructure spending, pivoting from constructing new facilities to outfitting existing data centers with specialized hardware.
Also read: Microsoft Data Center Pullback Sparks Wall Street Jitters Over AI Spending
Investment firms reportedly considering participation in the OpenAI funding include Magnetar Capital, an Illinois-based hedge fund potentially contributing up to $1 billion, alongside Coatue Management, Founders Fund, and Altimeter Capital Management.
SoftBank is also separately backing the Stargate Project—a Texas joint venture involving OpenAI, Oracle, and other partners.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
