SoftBank completes $40 billion investment in OpenAI

"SoftBank has fully completed its commitment to invest $40 billion in OpenAI. Last week, the Japanese company sent approximately $22.5 billion to the ChatGPT creator. This was reported by CNBC, citing anonymous sources. The completion of this deal brings SoftBank's stake in OpenAI to over 10 percent. It is one of the most ambitious investments by founder Masayoshi Son, who wants to firmly anchor his company in the AI industry."

"The financing was transferred in several rounds. In February, SoftBank finalized the terms for a total investment of $40 billion at a valuation of $260 billion. Sources reported at the time that the payment would be spread over 12 to 24 months. It now appears that this has been shortened to approximately 10 months. Of the total amount, SoftBank had already raised $10 billion from external parties and invested $8 billion itself."

"OpenAI desperately needs the capital. The company is struggling with high operating costs for training and running its AI models. At the same time, competition is increasing from parties such as Meta and Google, which are developing similar technology. According to CEO Sam Altman, his company has already signaled "code red" several times, just as Google once did when OpenAI first came up with ChatGPT."

SoftBank has completed its $40 billion investment commitment to OpenAI, sending about $22.5 billion in the latest tranche. The deal increases SoftBank's stake in OpenAI to more than 10 percent. SoftBank sold its entire Nvidia stake and a large portion of T-Mobile shares and reduced costs and staff to raise funds. The financing was transferred in multiple rounds after February terms set a $260 billion valuation, with the payment schedule compressed to roughly ten months. SoftBank previously raised $10 billion externally and invested $8 billion itself. Part of the funding will support the Stargate AI infrastructure project. OpenAI faces high operating costs and intensifying competition from Meta and Google, and CEO Sam Altman has signaled "code red" multiple times. Talks of a possible $10 billion Amazon investment could push OpenAI's valuation past $500 billion, creating a substantial paper gain for SoftBank.

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