SoftBank to invest $500mn in OpenAI

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Masayoshi Son’s SoftBank will invest $500mn into OpenAI as part of a fundraising round that is expected to close this week and value the artificial intelligence start-up at $150bn.

SoftBank will invest via its second Vision Fund, a large vehicle for backing start-ups, which is now mainly made up of Son’s personal wealth, according to two people with knowledge of the deal.

SoftBank will join existing investors, including venture fund Thrive Capital and Microsoft in a $6.5bn funding round, which is expected to close in the coming days, according to people familiar with the discussions.

The Japanese group was one of the most prolific start-up investors in the years leading up to 2022, during which time the valuation of young technology companies spiralled higher, often to unsustainable levels. SoftBank’s roughly $14bn investment into WeWork and Son’s close relationship with its founder Adam Neumann became emblematic of the excesses of that period after the co-working company collapsed from a peak valuation of $47bn in 2019.

After a period of retrenchment, SoftBank has ratcheted up its investments into AI, with Son declaring it was time “to go on the counteroffensive” to take advantage of the new technology.

SoftBank is the majority owner of UK chip designer Arm, and Son has spoken about his ambition to use it as the centrepiece in a network of companies advancing AI.

OpenAI is finalising the details of one of the biggest-ever private funding rounds against a chaotic backdrop. The company’s chief technology officer Mira Murati unexpectedly left the San Francisco-based company last week, along with Bob McGrew, chief research officer, and Barret Zoph, vice-president of research.

They are the latest in a series of senior departures this year that have stripped OpenAI of the majority of its founding team and its most prominent safety researchers.

The company is also exploring a corporate restructure that would do away with its current novel arrangement, in which investors take a stake in a for-profit subsidiary of the company, governed by a not-for-profit board, according to people with knowledge of the discussions. OpenAI’s chief executive Sam Altman has discussed taking a direct equity stake in the company for the first time as part of those plans, they added.

But many investors appear undeterred and still willing to commit to a company that has continued to push the frontier of AI technology. They are betting that OpenAI can see off competition from Big Tech rivals including Google and Meta, as well as start-ups such as Anthropic and Mistral.

SoftBank’s participation in the round was first reported by The Information SoftBank and OpenAI declined to comment.