SoftBank lines up $25 bn funding for OpenAI

SoftBank is in talks to invest up to $25 billion in San Francisco-based OpenAI, Reuters reported, citing an unidentified person familiar with the matter.

The potential funding comes after US President Trump announced a $500 billion artificial intelligence (AI) infrastructure initiative, dubbed Stargate, comprising OpenAI, SoftBank and Oracle.

The initiative aims to boost AI development in the US over the next four years.

As part of the ongoing talks, SoftBank is weighing investing between $15 billion and $25 billion in OpenAI, Reuters reported, adding that a portion of the funding could be used to pay for OpenAI’s participation in Stargate.

OpenAI, which was originally started as a nonprofit in 2015, is currently worth around $157 billion, but is looking to pump up its valuation to $340 billion with the upcoming funding round.

Since inception, the Sam Altman-led firm has sparked a boom in generative AI after launching its ChatGPT model in late 2022. It attracted huge investments, with Microsoft being its main investor, investing up to $13 billion.

The latest development comes after Chinese AI startup DeepSeek released R1, a reasoning model that is considered better and more cost-effective than OpenAI’s O1 model.

The release has generated huge interest in DeepSeek, which has boosted the popularity of its V3-powered chatbot app. It also brought a massive drop in tech stocks as investors are re-evaluating the AI industry.