OpenAI Secures $40 Billion In Record Funding Round

OpenAI, the artificial intelligence company behind the popular chatbot ChatGPT, has successfully closed a groundbreaking $40 billion funding round, marking the largest deal of its kind. This new investment, which values the company at an impressive $300 billion, includes contributions from SoftBank Group Corp. and a consortium of other investors. The deal nearly doubles OpenAI’s previous valuation of $157 billion, which was established during its fundraising round in October.

The news, first reported on March 26, confirms that OpenAI is finalizing the historic funding agreement. Chief Executive Sam Altman emphasized the significance of the investment, stating, “Hundreds of millions of people use ChatGPT each week. This investment helps us push the frontier and make AI more useful in everyday life.”

In addition to the funding, OpenAI is undertaking a corporate restructuring aimed at granting its for-profit division independence from the nonprofit entity that currently governs it. Sources familiar with the matter, who requested anonymity, indicated that the restructuring is expected to be completed by the end of the year.

SoftBank, the lead investor in this financing round, will initially commit $7.5 billion, alongside a $2.5 billion contribution from an investor syndicate. Key participants in the syndicate include Microsoft Corp., Coatue Management, Altimeter Capital Management, and Thrive Capital. A second tranche of $30 billion is scheduled for investment by the end of 2025, with SoftBank contributing $22.5 billion and the syndicate adding $7.5 billion.

The new agreement includes an incentive for OpenAI to expedite its restructuring process. If the company fails to complete the restructure by year’s end, SoftBank will have the option to reduce its investment from $30 billion to $20 billion. In such a case, OpenAI may seek additional investors to make up the difference, according to a source familiar with the deal.

In a filing, SoftBank revealed that its initial investment would be financed through Mizuho Bank and other financial institutions. SoftBank Chairman Masayoshi Son praised the transformative potential of AI, describing it as “a defining force shaping humanity’s future.” He also highlighted the partnership, stating, “Our expanded partnership with OpenAI accelerates our shared vision to unlock its full potential.”

Other potential investors, including Magnetar Capital and Founders Fund, have also engaged in discussions to join the funding round. Magnetar Capital, a hedge fund based in Evanston, Illinois, is expected to contribute up to $1 billion, according to several anonymous sources.