SoftBank Close to $40 Billion Initial Investment in OpenAI

SoftBank is closing in on a $40 billion initial investment in OpenAI, at a valuation of $260 billion before the funding, according to sources quoted by David Faber for CNBC.

The report said SoftBank will pay the amount over 12 to 24 months, with the first tranche expected next spring. The Japanese company will also have the ability to distribute up to $10 billion of the funding to other investors.

The investment would see SoftBank surpass Microsoft as OpenAI’s largest financial backer. The latter was valued at $157 billion in a private investment round in October.

OpenAI was initially expected to be valued at $340 billion, but according to a source familiar with the matter, the valuation will be closer to $300 billion after the new funding.

The sources indicated that part of this funding will be allocated to the Stargate project, a joint project between SoftBank, OpenAI and Oracle, which was announced in January by former US President Donald Trump. The project aims to invest billions of dollars in artificial intelligence infrastructure in the United States.