SoftBank in Talks to Invest Up to $25 Billion in OpenAI, Potentially Becoming Its Largest Backer
SoftBank Group Corp. is reportedly in discussions to invest between $15 billion and $25 billion in OpenAI, a move that could position the Japanese investment giant as the AI startup’s largest investor. This potential investment would be in addition to the $15 billion SoftBank has already committed to Project Stargate, a Texas-based joint venture with OpenAI aimed at building advanced data centers and AI infrastructure to support the ChatGPT maker, according to a source familiar with the matter.
The talks are still in the early stages and may not result in a finalized deal. Both SoftBank and OpenAI have declined to comment on the discussions.
Strengthening Ties Between SoftBank and OpenAI
SoftBank CEO Masayoshi Son and OpenAI CEO Sam Altman have a long-standing relationship, rooted in their shared vision for advancing artificial intelligence. The two executives were recently seen together at a U.S. event where President Donald Trump announced the launch of Project Stargate. The joint venture, which includes partners Oracle Corp. and Abu Dhabi-backed MGX, plans to deploy an initial $100 billion, with investments potentially reaching $500 billion over four years.
This potential $25 billion investment would significantly deepen SoftBank’s involvement in OpenAI, which is already backed by Microsoft Corp., its largest investor. Microsoft has declined to comment on the ongoing talks.
OpenAI’s Growing Demand for Data Center Capacity
OpenAI is seeking to expand its data center capabilities to enhance the power and efficiency of its AI models. The company faces increasing competition in the AI space, particularly from Chinese startup DeepSeek, which has demonstrated the ability to match OpenAI’s capabilities at a fraction of the cost. Currently, OpenAI relies heavily on Microsoft for its cloud and computing needs, but the partnership with SoftBank could provide additional resources to scale its operations.
SoftBank’s Strategic Push into AI Hardware
SoftBank has been exploring opportunities to enter the lucrative AI hardware market after years of mixed results from its investments in AI startups through its Vision Fund. Son and Altman first met in 2019, when Son proposed a $1 billion investment in OpenAI, though the deal never materialized. Since then, the two have collaborated on addressing the global semiconductor shortage, a critical issue for AI development.
Last month, SoftBank’s Vision Fund invested $500 million in OpenAI and launched a $1.5 billion tender offer to buy additional shares from OpenAI employees. The potential $25 billion investment would mark a significant escalation in SoftBank’s commitment to the AI sector.
Market Reaction and Skepticism
News of SoftBank’s potential investment in OpenAI boosted Asian chip-related stocks, including Advantest Corp. However, SoftBank’s own shares dipped 1% in Tokyo trading, reflecting investor caution.
Takehiko Masuzawa, head of equity trading at Phillip Securities Japan, noted, “It makes sense that Nasdaq and semiconductor-related stocks are being bought, but SoftBank, which is putting up the money, isn’t going to see the same buying momentum.”
Meanwhile, some industry players, including Elon Musk, have expressed skepticism about the lack of details surrounding Project Stargate and its financing. Musk, founder of xAI, questioned whether the companies involved in the venture could fulfill their financial commitments.
SoftBank’s Financial Capacity for the Bet
SoftBank had approximately $25 billion in cash and cash equivalents at the end of September, along with stakes in hundreds of startups and a 90% ownership in chip designer Arm Holdings Plc. These assets could help finance the ambitious investment in OpenAI. However, doubts remain about whether Project Stargate represents a significant expansion of previously announced data center plans.
Son recently visited Mar-a-Lago to announce SoftBank’s commitment to invest $100 billion in the U.S. over the next presidential term, with Project Stargate being a key component of that initiative.
Looking Ahead
As discussions between SoftBank and OpenAI progress, the potential $25 billion investment could reshape the AI landscape, providing OpenAI with the resources needed to maintain its competitive edge. For SoftBank, the move represents a bold step into the AI hardware market, signaling its confidence in the future of artificial intelligence. However, with skepticism lingering and competition intensifying, the success of this partnership will depend on its ability to deliver tangible results in the rapidly evolving AI industry.