SoftBank Group closed its long-awaited $22.5 billion investment in OpenAI last Friday, securing an approximately 11% stake in the artificial intelligence company as competition with Google and other tech giants intensifies.
The transaction lifts SoftBank’s total funding for the ChatGPT maker to $34.7 billion, marking one of the largest private technology bets in history. To finance the deal, the Japanese conglomerate drew down its entire unused $11.5 billion credit facility backed by shares in chip designer Arm Holdings.
The completion caps months of aggressive fundraising by CEO Masayoshi Son, who liquidated SoftBank’s $5.8 billion Nvidia position, offloaded $4.8 billion in T-Mobile US shares, and tightened dealmaking across the Vision Fund to channel resources toward OpenAI.
Both companies are partners in Stargate, a $500 billion initiative to build AI data centers across the United States. OpenAI CEO Sam Altman has outlined plans to construct 30 gigawatts of computing capacity at an estimated cost of $1.4 trillion.
Whether these massive capital outlays will generate commensurate returns remains uncertain. Some analysts have raised concerns about a potential AI bubble as tech giants and their financial backers race to outspend one another on infrastructure.
SoftBank invested in OpenAI at a $300 billion valuation earlier this year. The startup is now reportedly in talks for additional funding that could value it near $900 billion.
