SoftBank is reportedly in discussions to lead a massive funding round of up to $40 billion in OpenAI, the artificial intelligence powerhouse behind ChatGPT, at a post-money valuation of $300 billion.
If finalized, this deal would mark the largest-ever single funding round for a private company, solidifying OpenAI’s dominance in the AI industry.
According to sources familiar with the matter, cited by Reuters, the proposed investment comes with a pre-money valuation of $260 billion, which represents a staggering leap from the $150 billion valuation OpenAI commanded just a few months ago. These figures indicate not only OpenAI’s meteoric rise but also the growing appetite among major investors to stake their claim in the AI revolution.
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Neither OpenAI nor SoftBank has commented on the discussions, but earlier reports from The Wall Street Journal suggested that OpenAI was already in talks with SoftBank for a round that could push its valuation even higher, potentially reaching $340 billion.
SoftBank, which has long sought to deepen its role in artificial intelligence, could contribute between $15 billion to $25 billion directly into OpenAI. A portion of these funds may be earmarked for OpenAI’s commitments to Stargate, a joint venture between Oracle, OpenAI, and SoftBank, designed to bolster U.S. leadership in AI against China and other geopolitical competitors.
Stargate is planning to invest a staggering $500 billion in AI infrastructure and development, making it one of the most ambitious technology investment projects ever conceived. If the deal materializes, SoftBank’s latest funding move would be in addition to the $15 billion it has already pledged to Stargate.
However, sources caution that discussions are still at an early stage, and terms could change before an agreement is reached.
Is DeepSeek’s Breakthrough A Challenge to OpenAI’s Leadership?
However, despite the ambitious vision behind the Stargate initiative, recent breakthroughs in AI—particularly the emergence of DeepSeek—have raised serious questions about whether the deal is already becoming obsolete before it even materializes.
The AI world was shaken recently by the announcement of DeepSeek, an open-weight large language model (LLM) developed by a team of Chinese researchers. Unlike OpenAI’s closed-source approach, DeepSeek offers a high-performance, transparent alternative that challenges the need for astronomically expensive AI development projects like Stargate.
DeepSeek has demonstrated capabilities that, in some areas, rival OpenAI’s best models—at a fraction of the cost. The fact that a new entrant could develop a model approaching OpenAI’s level with far fewer resources has led some industry observers and investors to question whether SoftBank’s multi-billion-dollar investment in Stargate and OpenAI is justifiable.
It is widely believed that SoftBank’s Stargate push is exorbitant, with many pointing out that the AI industry is evolving faster than expected, making long-term bets on costly infrastructure projects risky. Given the open-source breakthroughs like DeepSeek and Meta’s Llama series, many in the AI community believe that the next generation of AI dominance may not be determined solely by compute power, but by model efficiency, strategic partnerships, and algorithmic breakthroughs.
For years, the dominant belief in AI investment has been that whoever controls the most computing power and data will win. This thinking has fueled massive projects like OpenAI’s partnership with Microsoft, Google’s DeepMind, and now the Stargate initiative. However, DeepSeek’s emergence suggests that the AI race may not be as capital-intensive as previously thought.
If an open-weight model can deliver comparable performance without a multi-billion-dollar investment, does the Stargate project still make sense? That’s the question many in Silicon Valley and the financial world are now asking.
A Defining Moment for OpenAI and AI Investments
This potential funding round underscores a broader trend of skyrocketing valuations for AI companies, as major players rush to secure stakes in cutting-edge technologies that could define the next industrial revolution. OpenAI, backed by Microsoft, has emerged as a leader in generative AI, driving widespread adoption of ChatGPT and other AI-driven products that have reshaped industries ranging from software development to creative content production.
For SoftBank, the deal aligns with its long-term AI investment strategy. The Japanese conglomerate, led by Masayoshi Son, has been actively positioning itself as a dominant player in AI and robotics, following previous bets on companies such as Arm Holdings and Nvidia. With this potential investment, SoftBank would further cement its influence in the global AI market.
If SoftBank successfully leads the funding round, OpenAI could gain a war chest of capital to accelerate its AI research, scale its cloud computing infrastructure, and expand into new markets. The funding could also help OpenAI navigate increasing regulatory scrutiny, as governments worldwide grapple with the implications of AI on privacy, labor markets, and security.
Meanwhile, the AI race continues to heat up, with Google’s DeepMind, Anthropic, and Meta also vying for dominance in the sector. With OpenAI’s potential valuation climbing into the $300 billion range, the company is now approaching the ranks of the world’s most valuable private firms, on par with established tech giants.