OpenAI is
set to raise up to $40 billion in a landmark funding round led by SoftBank
Group, valuing the artificial intelligence company behind ChatGPT at $300
billion, nearly doubling its previous valuation.

OpenAI Secures $40 Billion
Investment Led by SoftBank at $300 Billion Valuation

The
Japanese investment giant has committed to providing $10 billion in mid-April,
with an additional $30 billion planned for December. The December investment is
contingent upon OpenAI successfully transitioning to a for-profit structure by
year-end.

“OpenAI
has very ambitious plans on many fronts and needs a lot of capital to achieve
these goals,” industry analyst Gil Luria of D.A. Davidson & Co
commented for Reuters.

SoftBank
intends to syndicate $10 billion of its total investment to other investors.
The remaining funding is expected to come from existing backers including
Microsoft, Coatue Management, Altimeter Capital, and Thrive Capital.

If OpenAI fails to complete
its planned restructuring, SoftBank’s total investment would be reduced to $20
billion.

Expanding AI Capabilities

The San
Francisco-based AI developer plans to use the massive capital infusion to
advance its research initiatives, expand computational infrastructure, and
enhance its suite of AI tools. OpenAI highlighted its goal to deliver
increasingly powerful capabilities to the 500 million people who currently use
ChatGPT on a weekly basis.

The funding
comes amid surging investor enthusiasm for artificial intelligence
technologies, driven by widespread adoption of chatbots and the emergence of
sophisticated AI agents across industries. Enterprises have increasingly
integrated AI solutions to streamline operations and improve customer
experiences.

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Corporate Restructuring

As part of
its growth strategy, OpenAI announced plans to establish a public benefit
corporation structure. This new framework aims to attract additional investment
while balancing shareholder interests with broader public benefits.

The company
is also partnering with SoftBank and Oracle on the ambitious $500 billion
Stargate project, which will establish a network of data centers designed to
power AI workloads across the United States.

Valuation Milestone

The new
funding round, which follows a $6.6 billion raise in October that valued OpenAI
at $157 billion, propels the AI developer into the ranks of the world’s most
valuable private companies. This exclusive club includes Elon Musk’s SpaceX,
China’s ByteDance, and payment processor Stripe.

SoftBank
plans to finance its initial $10 billion investment through borrowings from
Mizuho Bank and other financial institutions, with legal advice provided by
Morrison Foerster.

Musk’s Failed OpenAI
Takeover Bid

In
February, Elon Musk led
an ambitious $97.4 billion takeover attempt of OpenAI. Altman promptly
rejected the unsolicited offer, responding with a cheeky counter-proposal to
purchase Musk’s X platform for $9.74 billion instead.

The
rejection underscores the intensifying conflict between the two tech titans.
Musk, who co-founded OpenAI in 2015 but departed following governance
disagreements, has repeatedly criticized the organization for abandoning its
original nonprofit mission. Meanwhile, Altman maintains that transitioning to a
for-profit structure is essential for securing the massive capital needed to
advance AI research and development.

Shortly
after his OpenAI acquisition attempt failed, Musk’s
AI company xAI unveiled Grok-3, a significant upgrade to its chatbot platform.
The new model, which xAI claims was trained with ten times more computing power
than its predecessor, features enhanced reasoning capabilities and a new
“DeepSearch” function designed to compete directly with ChatGPT.
According to xAI, Grok-3 outperforms rival models in mathematical reasoning and
complex problem-solving benchmarks.