SoftBank is in discussions to invest as much as $25B in OpenAI

SoftBank is negotiating to invest as much as $25 billion in OpenAI as part of a larger collaboration. That might lead the Japanese conglomerate to allocate over $40 billion towards AI projects with the Microsoft-supported startup.
According to the report, the possible investment would position SoftBank as OpenAI’s largest individual supporter. This also exceeds Microsoft, which initially invested in the ChatGPT creator back in 2019. The agreement follows the announcement from both firms last week that they would collaborate on a $100 billion investment in Stargate. An American data center initiative for OpenAI could grow to $500 billion over the next four years.
SoftBank intends to invest between $15 billion and $25 billion directly into OpenAI. In addition to its $15 billion Stargate pledge. OpenAI plans to invest approximately $15 billion in Stargate, while SoftBank’s equity funding might potentially fulfill OpenAI’s infrastructure obligation.
The discussions arose as the launch of DeepSeek’s R1 “reasoning” model, developed on a fairly limited budget, shook public markets this week.
The chip powerhouse Nvidia plummeted by as much as $589 billion in a single day before experiencing a small rebound. Investors feared that significant spending on costly AI hardware may prove unnecessary if businesses can attain comparable outcomes with fewer resources.
OpenAI asserted earlier this week that it had discovered proof of DeepSeek utilizing OpenAI’s exclusive models to train R1 and additional models via a method known as “distillation,”. That enables developers to attain comparable performance with reduced models at significantly lower expenses. The company states that this would breach its service agreement, which forbids utilizing outputs to create rival models.
OpenAI’s agreement with SoftBank, which the Financial Times reports is not yet finalized. That marks SoftBank founder Masayoshi Son’s largest wager since investing $16 billion in WeWork. This would also lessen OpenAI’s reliance on Microsoft for computing resources, as Microsoft has recently consented to relinquish its role as OpenAI’s sole cloud provider.
According to the report, approximately 20% of Stargate’s funding is anticipated to come from equity, while the rest will be financed through debt backed by assets and cash flow. OpenAI, which achieved a valuation of $157 billion last year, is also in talks to convert into a for-profit entity to enable further fundraising.