SoftBank likely to pump $25 bn into ChatGPT parent Open AI

SoftBank may invest up to $25 billion into ChatGPT parent OpenAI and become the AI firm's largest financial backer, a report by The Financial Times says.

This follows the announcement of Stargate, a $500 billion initiative by SoftBank, OpenAI, and Oracle aimed at keeping the U.S. ahead in the global AI race. The venture was unveiled last week at the White House by U.S. President Donald Trump, SoftBank CEO Masayoshi Son, OpenAI CEO Sam Altman, and Oracle Chairman Larry Ellison.

While the deal is yet to be finalised, reports suggest OpenAI allowed employees to sell about $1.5 billion worth of shares to SoftBank in a tender offer last November.

According to the Financial Times, SoftBank’s total investment in its partnership with OpenAI could even exceed $40 billion.

Since then, China-based startup DeepSeek however, has disrupted the market with a free AI assistant, claiming it was developed at a lower cost using fewer resources than Open AI’s ChatGPT. On Tuesday evening, Alibaba also unveiled its own AI model, Qwen 2.5 max.

Speculation around DeepSeek’s ability to achieve OpenAI-level performance with its R1 model at a fraction of the cost raises questions about where SoftBank’s potential investment might be directed.

Reports reiterate that SoftBank founder Masayoshi Son sees his investments in OpenAI as part of his broader goal to develop ‘superintelligence,’ when technology surpasses human cognition. On Tuesday, the Financial Times reported that SoftBank plans to invest in robotics startup Skild AI at a $4 billion valuation. Known for bold bets, Son has made highly leveraged investments, some of which—like Byju’s and WeWork—collapsed before his notable comebacks.

A $15 billion investment would make the Japanese billionaire OpenAI’s largest single backer, though currently Microsoft remains its biggest investor. Since first investing in OpenAI in 2019, Microsoft has reportedly contributed around $13 billion, helping drive the company’s valuation to $157 billion in 2024. In October, it closed a $6.6 billion funding round as it prepares to take on competitors like Elon Musk’s xAI, Microsoft, Google, Amazon, and Anthropic.

SoftBank acquired a $2 billion stake last year. ( in what?)

Founded as a nonprofit in 2015, OpenAI is transitioning to a for-profit model through a public benefit corporation, allowing it to raise more capital and scale operations. OpenAI’s ChatGPT launch in late 2022 sparked the generative AI boom.