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SoftBank Group is close to agreeing an additional $30bn investment in OpenAI as Japanese billionaire Masayoshi Son raises his bet on Sam Altman’s tech group.
OpenAI is looking to raise as much as $100bn in a funding round that could value the ChatGPT maker at about $750bn before the new investments, according to two people with knowledge of the fundraising.
SoftBank is already OpenAI’s largest investor in terms of total invested after putting in more than $30bn. The agreement could close in the coming days, the people said, adding that the amount could change as discussions are continuing.
OpenAI is also in talks with Amazon and Nvidia, as well as sovereign investors including the Abu Dhabi Investment Authority and MGX, for the funding round, said the people.
SoftBank and OpenAI declined to comment. ADIA and MGX did not immediately respond to requests for comment.
The new round of fundraising, which was first reported by the Wall Street Journal, comes as OpenAI seeks to regain its early lead in the race to develop and commercialise generative AI tools and build momentum for an expected initial public offering.
The AI group has faced growing competition from rival start-up Anthropic and Google. Following the release of Google’s latest model, OpenAI chief Sam Altman issued a “code red” to staff in December, urging them to focus on improving its core product, ChatGPT, and rein in work on other projects.
OpenAI said its annualised revenue surpassed $20bn last year, but the company is still losing billions each year thanks to the high cost of training and running its models.
Pressure on the company to fundraise and boost revenue has increased over the past year as Altman signed a series of deals to purchase about $1.4tn in computing power and infrastructure over the next decade.
SoftBank founder Son has staked his reputation on making his company a critical backer of AI, a technology he has said will shape “humanity’s future”. Shareholders had ploughed money into the Japanese group as a way to gain exposure to OpenAI.
Despite shares falling almost 40 per cent from their peak in October and concern from some of his lieutenants, Son remains deeply committed to Altman and OpenAI, said the people with knowledge of the fundraising.
After a company restructuring last year, SoftBank was left with roughly 11 per cent of OpenAI, compared with Microsoft’s close to 27 per cent. As part of its drive to fund its bets on OpenAI, SoftBank sold its entire stake in Nvidia for $5.8bn.
SoftBank-owned Arm is expected to soon unveil plans for a new AI chip. The Japanese group has also invested in cloud software developer Oracle, is supporting the Stargate data centre project in the US and bought ABB’s robotics arm in a deal valuing the business at $5.4bn.
Son, a serial dealmaker, most recently agreed to acquire DigitalBridge, a US-based investor in data centres and telecoms infrastructure, for about $4bn. SoftBank is also expected to announce a series of AI infrastructure projects in the US in the coming months, said people familiar with the plans.
The massive outlays involved are raising eyebrows. This month, rating agency S&P said SoftBank’s “accelerating large-scale investments in the field of artificial intelligence will put downward pressure on the company’s creditworthiness”.
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