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Japanese investment company SoftBank is set to invest $500 million in OpenAI’s latest funding round.
As initially reported by The Information, the significant sum will come from the bank’s Vision Fund, contributing to the multi-billion dollar funding for the ChatGPT maker.
The update follows recent speculation that OpenAI was about to embark on a drive to raise $6.5 billion, increasing the company’s valuation to $150bn in the process.
This venture would represent SoftBank’s first investment in the company led by CEO Sam Altman, but achieving the desired valuation is dependent on the company successfully altering its corporate structure and eradicating a profit cap for investors.
Reports last week indicated OpenAI is moving toward its objective of operating as a for-profit entity, a move that has angered Elon Musk, Altman’s former business partner and ongoing adversary.
A weekend report in the New York Times cited documents shared by OpenAI with backers and potential funders, detailing a 1,700% increase in revenues over the last year. The same documents anticipated a loss of $5bn this year to cover increased costs in operations and salaries.
Consolidation of Capital
While SoftBank appears to be on the brink of pumping funds into the AI heavyweight, the same can’t be said for Apple which has decided not to participate in the large-scale funding round.
Microsoft, a long-time supporter of OpenAI, is lined up to provide further funding.
This latest financing round will go some way to consolidating OpenAI’s position at the top end of AI and LLM development. More of the leading companies, such as Perplexity and Mistral, are looking in the same direction, to secure further capital to maintain their position at the front of the pack.
