SoftBank in Talks to Invest Up to $25 Billion in OpenAI

SoftBank Group Corp. is reportedly engaged in discussions to invest a substantial sum of $15-25 billion in OpenAI, a prominent AI startup. This move could potentially elevate SoftBank to the position of OpenAI's largest financial backer.

According to an undisclosed source, the Japanese investment firm intends to supplement the $15 billion already allocated to Project Stargate, a collaborative venture between SoftBank and OpenAI based in Texas. Project Stargate aims to construct data centers and other AI infrastructure to support the development of ChatGPT and other AI-based applications.

These plans are currently in their early stages and may not result in a finalized investment. Representatives from SoftBank and OpenAI have declined to comment on the matter.

SoftBank's CEO, Masayoshi Son, and OpenAI's CEO, Sam Altman, share a close relationship centered around their mutual interest in fostering artificial intelligence advancements. Along with Oracle Corp. and MGX, Stargate intends to initially deploy $100 billion and invest up to $500 billion over a four-year period.

OpenAI seeks expanded data center capacity to enhance the capabilities of its AI systems. The company faces growing competition, particularly from the Chinese startup DeepSeek, which has reportedly demonstrated comparable capabilities to OpenAI at a significantly lower cost. OpenAI has largely relied on Microsoft for its cloud and computing needs.

SoftBank has sought an optimal entry point into the lucrative AI hardware market, having experienced mixed success with its AI startup investments through the Vision Fund. Son's initial $1 billion investment offer to OpenAI in 2019 did not materialize. Since then, the two CEOs have expressed concerns about the scarcity of semiconductors essential for AI applications, and the Vision Fund invested $500 million in OpenAI last month.

News of SoftBank's potential investment has positively impacted Asian chip-related stocks, including Advantest Corp. SoftBank's own shares experienced a slight decline of 1% in Tokyo on Thursday.

Industry experts have raised questions regarding the details and financing of Stargate. Skepticism remains about whether Stargate represents a significant increase from previous data center construction plans. SoftBank's financial resources include approximately $25 billion in cash and cash equivalents, as well as holdings in numerous startups and a 90% stake in Arm Holdings Plc.