Japan’s tech giant SoftBank is reportedly close to finalizing a massive investment of $40 billion in AI leader OpenAI. This deal would value OpenAI at $260 billion, surpassing its previous valuation and making SoftBank the largest investor. The news led to a dip in Microsoft stock prices.
SoftBank’s move marks a significant shift in the company’s relationship with OpenAI. Microsoft has previously invested over $13 billion in OpenAI but will now be replaced as the biggest investor. However, it appears that Microsoft is distancing itself from OpenAI by partnering with other cloud computing companies such as Oracle and Coreweave.
OpenAI recently raised $6.6 billion in new funding, taking its valuation to $157 billion. The company plans to adopt a for-profit business structure in 2025 and create a Delaware public benefit corporation to oversee commercial operations. This move is part of the AI boom, which relies heavily on large language models (LLMs) that require massive amounts of data and computing power.
SoftBank’s investment in OpenAI follows Chinese startup DeepSeek’s recent entry into the market with low-cost, open-source artificial intelligence training models. The news has raised concerns about competition in the AI industry, particularly with Meta Platforms’ open-source AI models.
Microsoft stock prices dropped a fraction after the announcement of SoftBank’s investment in OpenAI. This comes as Microsoft faces revenue growth challenges in its Azure cloud computing unit due to data center capacity constraints.
Source: https://www.investors.com/news/technology/microsoft-stock-openai-softbank-investment