By Deepa Seetharaman

SoftBank is in talks to invest $15 billion to $25 billion in OpenAI, potentially deepening the relationship between the two companies that are already planning a significant artificial-intelligence infrastructure initiative.

Some of that equity investment could be used for OpenAI's commitment to Stargate, a joint venture with SoftBank and others it announced last week at the White House, according to a person familiar with the matter. Stargate, which also includes Oracle and the United Arab Emirates investment fund MGX, intends to invest as much as $500 billion in AI data centers for use by OpenAI over the next four years.

The deal would make SoftBank OpenAI's biggest investor, displacing Microsoft, which has committed nearly $14 billion to date. However, SoftBank would have a smaller stake in OpenAI's for-profit division, as Microsoft invested earlier, the person familiar with the matter said.

SoftBank's investment in OpenAI would be distinct from its own commitment to put some $15 billion into Stargate, according to the knowledgeable person.

The Financial Times reported previously on the investment talks.

SoftBank's investment in OpenAI would be distinct from the Japanese company's own commitment to put some $15 billion into Stargate, according to the knowledgeable person.

The Financial Times reported previously on the investment talks.

If the deal comes together, it would create a tight partnership between two of the biggest names in global business: OpenAI Chief Executive Sam Altman and SoftBank CEO Masayoshi Son. The men have been growing closer over the past year and discussed a plan Altman had to overhaul the global semiconductor industry.

Son, who has said he uses ChatGPT every day, told shareholders in June 2023 that he wanted SoftBank to "lead the AI revolution." In October, his firm made its first investment in OpenAI, putting $500 million into the U.S. developer's $6.6 billion funding round.

In addition to its commitment to Stargate, OpenAI needs investment funds to cover its multibillion-dollar annual losses, as it spends heavily to develop cutting-edge technology and deals with intense price competition against rivals such as Google and Anthropic, as well as free, open-source technology from Meta Platforms and China's DeepSeek.

At the same time it is growing closer to SoftBank, OpenAI has been drifting apart from its longtime closest partner: Microsoft. In addition to its investments, Microsoft was until this month the exclusive provider of cloud-computing services for OpenAI.

ChatGPT's launch in late 2022 significantly escalated OpenAI's need for chips to develop and operate its products. Over the past two years, OpenAI has said Microsoft wasn't providing it with enough cloud capacity, The Wall Street Journal previously reported.

The two companies recently revised their deal allowing OpenAI to work with other providers, including Stargate, though Microsoft retains the right of first refusal.

Microsoft CEO Satya Nadella said on an earnings call with analysts Wednesday that he remains happy with his relationship with OpenAI, but his company's investments in data centers are "fungible" and can be used by different customers.

Write to Deepa Seetharaman at deepa.seetharaman@wsj.com

(END) Dow Jones Newswires

January 29, 2025 22:46 ET (03:46 GMT)

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