OpenAI Eyes $40 Billion Funding Round as DeepSeek Shakes Up AI Market

OpenAI, the renowned creator of the widely used AI tool ChatGPT, is currently working to secure an additional $40 billion in funding, according to a report from The Wall Street Journal. If successful, this funding would raise the company’s valuation to an extraordinary $340 billion, significantly increasing its prominence within the tech industry.

Japanese tech conglomerate SoftBank is reportedly leading the investment talks, with discussions pointing toward a commitment of between $15 billion and $25 billion. If the deal is finalized, SoftBank could become OpenAI's largest financial backer, reinforcing its position as a major player in the AI field.

This funding initiative comes on the heels of concerns raised by a disruptive new entrant in the AI market—DeepSeek, a Chinese startup that recently launched a highly advanced chatbot at a fraction of the price of its American competitors. The chatbot's impressive capabilities, combined with its lower cost, have created waves across the global AI ecosystem, intensifying competition and putting pressure on industry leaders like OpenAI.

The reports surrounding this fresh funding initiative were first highlighted by a news agency, which also noted that this move occurs just three months after OpenAI’s most recent funding round that had already valued the company at $157 billion. Should this latest round succeed, OpenAI’s valuation would skyrocket, marking an unprecedented leap in such a short time—underscoring the massive financial demands required to push the boundaries of AI development.

SoftBank’s Role in Funding and AI Infrastructure Investment

SoftBank, which has long been known for its large-scale investments, is also a key player in the Stargate initiative, a groundbreaking project led by former U.S. President Donald Trump aimed at injecting up to $500 billion into the AI infrastructure in the United States. A portion of the new funds is expected to contribute to OpenAI’s $18 billion commitment to the project, further aligning SoftBank’s financial goals with the growth of cutting-edge AI.

The proposed investment by SoftBank could go beyond the initial figures. According to a news agency, SoftBank's total financial involvement with OpenAI could ultimately exceed $40 billion, depending on how the discussions unfold. This expansion of SoftBank’s role in OpenAI's funding signals a deepening partnership between the two entities.

SoftBank's shares surged by 3% on Thursday in Tokyo, reflecting investor optimism surrounding the potential deal. The company, founded by Japanese entrepreneur Masayoshi Son, is known for its early stakes in major tech companies like Yahoo and Alibaba.

However, in recent years, some of its ventures have faced challenges. Despite these hurdles, Son has increasingly focused on artificial intelligence, aiming to leverage SoftBank's ownership of chip designer Arm to position the company at the forefront of the AI revolution.

Elon Musk’s Criticism of the Stargate Initiative

While SoftBank's potential involvement with OpenAI continues to gain traction, it has not been without controversy. Tesla CEO Elon Musk, a former supporter and early backer of OpenAI, has expressed his dissatisfaction with the Stargate initiative, claiming on the social platform X that its primary investors "don't actually have the money."

Musk's comments reflect a larger rift between him and OpenAI’s founder, Sam Altman. The two have been embroiled in a long-standing dispute over the direction of the company, with Altman dismissing Musk's remarks as "wrong."

This ongoing tension highlights the complexities of the evolving AI landscape, with key figures like Musk and SoftBank’s Masayoshi Son shaping its trajectory in their own ways.