SoftBank completes $41 billion investment in OpenAI, deepening bet on AI
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The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato
By Krystal Hu
Dec 30 (Reuters) - SoftBank Group said it completed a $41 billion investment in OpenAI, one of the largest-ever private funding rounds that would give the Japanese firm a stake of about 11% in the ChatGPT maker.
SoftBank Chief Executive Masayoshi Son has made an "all in" bet on OpenAI and is expanding investment in artificial intelligence and related infrastructure, hoping to capitalize on surging demand for the computing capacity that underpins AI applications.
The completion of the latest funding round for OpenAI comes just days after SoftBank unveiled a deal to buy digital infrastructure investor DigitalBridge Group in a deal valued at $4 billion.
On Wednesday, SoftBank said it completed an additional $22.5 billion investment in OpenAI after putting in $7.5 billion in April. OpenAI also received an upsized syndicated co-investment from other backers worth $11 billion, SoftBank added.
In March, SoftBank agreed to invest up to $40 billion into a for-profit subsidiary of OpenAI, with the funding structured as a combination of direct capital and syndicated co-investment from other backers.
The deal valued OpenAI at around $300 billion on a post-money basis, but a later secondary stock sale completed in October, valued the company at around $500 billion, according to Pitchbook data.
CNBC first reported the news earlier in the day.
AI has become the central axis of global technology markets this year, driving a surge of investment by the world's largest companies and reshaping investor expectations.
OpenAI has emerged as a central pillar of that industry-wide AI spending push.
The ChatGPT maker along with Oracle and other stakeholders has planned a project dubbed "Stargate", a vast, multi-year data-center initiative aimed at supporting next-generation AI models, with backing from major investors including SoftBank.
(Reporting by Akash Sriram and Surbhi Misra in Bengaluru and Krystal Hu in San Francisco; Editing by Krishna Chandra Eluri, Miyoung Kim and Thomas Derpinghaus)
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