- OpenAI secured up to £31 billion from SoftBank in a funding round that values it at £232 billion. The intention is to support AI research and tools like ChatGPT.
- That £7.7 billion would be hard cash upfront, with another £23.2 billion during December, depending on OpenAI’s shift away from a not-for-profit structure into a for-profit and a further £387 billion Stargate project with Oracle.
The tech news: OpenAI, the creator of ChatGPT, announced on Monday that it will be funding up to £31 billion ($40 billion) in a massive financing round led by Japan’s SoftBank. With a breathtaking valuation of £232 billion ($300 billion), the money will be used to push the frontiers of AI research, ramp up computing power, and sharpen the tools for customers like you and me.
SoftBank has also shown great willingness. Up to £7.7 billion ($10 billion) has been promised to OpenAI by April 2025. In December, there will be further funding of £23.2 billion ($30 billion), assuming that OpenAI declares to switch over to a for-profit corporation by the end of this year. They are bringing in some mysterious co-investors to share £7.7 billion of the load. A little bird told Reuters, and the rest is being put together by Microsoft (OpenAI’s long-time partner), Coatue Management, Altimeter Capital, and Thrive Capital. But there is a beat: if OpenAI’s big restructuring does not pan out, SoftBank may cut it down to a total of £15.5 billion ($20 billion).
Chasing Big AI Goals
If you’ve ever chatted with ChatGPT, you’re one of the 500 million folks OpenAI is aiming to wow every week. The San Francisco crew wants to roll out even smarter tools, and this funding is their ticket to do it. Just last October, they nabbed £5.1 billion ($6.6 billion) at a £121 billion valuation—now they’re nearly doubling that. Talk about a glow-up!
“OpenAI has very ambitious plans on many fronts and needs a lot of capital to achieve these goals,” said Gil Luria from D.A. Davidson & Co. He reckons the list of investors willing to splash this kind of cash is shrinking, and SoftBank’s one of the few still in the game—though some wonder if they’ve got the dosh to keep up.
Big betting for SoftBank
Starting with £7.7 billion, borrowed from pals at Mizuho Bank and other wealth managers, with U.S. law firm Morrison Foerster smoothing out the roadside hiccups. But that was hardly issuing cheques. They started the largest project in collaboration with OpenAI and Oracle for a whopping £387 billion ($500 billion) Stargate project. And, by the way, a massive network of data centres across the U.S. is powering the AI generation tomorrow. That sounds cool, right?
These days, when someone talks about AI, it lights up the atmosphere completely. You see chatbots on every street corner, while witty AI agents seem to pop up in random places. For example, as businesses set out to use AI for their day-to-day grind or try to make it easier for users, investors are also scrambling for the next big catch.
OpenAI Follows a New Roadmap.
Things get interesting at this point: OpenAI is planning a business transformation. They will become a public benefit corporation, a hybrid approach that has an element of doing good in the world. The move will attract more funding and resources and yet keep shareholders and the public happy. As always, Microsoft is there to support them.
If this comes to fruition, OpenAI could join the ranks of big boys like SpaceX, ByteDance, or Stripe. If this switch towards profit goes south, however, OpenAI may lose some funding from SoftBank and be left with fewer resources for the game.
A Good Takeover by AI
Well, let’s face it, it’s a reality that artificial intelligence is changing everything in life – from the busiest chatbot sorting your queries to even the fastest delivery that you would have bought at the shop. When leaving no stone unturned, you have £31 billion in the bank to open your vault on OpenAI. Their association with SoftBank and Oracle could turn the world upside down in AI; I bet we will see something fabulous soon.
Save the dates for December. Let’s open the curtains for the big metamorphosis that OpenAI will roll out with that; it comes with the full £31 billion promise of SoftBank. For now, the ChatGPT are “full steam ahead”, and I’m looking forward to seeing what’s coming up next!
