Reports hint that SoftBank, the Japanese powerhouse, is considering investing a massive $25 billion into the Microsoft-backed firm, OpenAI. This essentially pushes the corporate titan ahead of Microsoft, standing as the biggest backer of the avant-garde AI startup.
This exceptional deal, if consummated, comes as both the firms mull investing a prodigious $100 billion into Stargate – a pivotal U.S. data center project serving OpenAI. SoftBank’s involvement includes a direct investment of $15 to $25 billion into OpenAI, along with a $15 billion commitment to the Stargate project.
Interestingly, these discussions are underway at a turning point, marked by the recent release of the R1 “reasoning” model by Chinese firm DeepSeek. This stirred up the public markets impacting the valuation of chip behemoth, Nvidia.
In the meantime, OpenAI alleges that DeepSeek exploited its proprietary models to train R1. If confirmed, this would be a clear infringement of OpenAI’s terms of service, blocking the usage of outputs to foster competing models.
The prospective OpenAI-SoftBank deal, yet to be finalized, could be the largest investment since SoftBank’s massive cash infusion of $16 billion into WeWork. Furthermore, it symbolizes the diminishing reliance on Microsoft for computational resources, even as Microsoft recently relinquished its exclusive cloud provider role for OpenAI.
Nearly a fifth of the funding for Stargate is projected to be equity, with the remaining financed via debts collateralized against assets and cash flow. Concurrently, OpenAI, evaluated at an imposing $157 billion last year, is pursuing the transition into a profit-making firm to enable auxiliary fundraising.
Original source: Read the full article on TechCrunch
