By Adam Clark

SoftBank Group has agreed to lead a funding round of up to $40 billion in OpenAI. It's a deal which should boost the value of Microsoft's stake in the ChatGPT maker but raises the bar for the successful conversion of OpenAI into a for-profit company.

The Japanese technology-and-telecoms company said Tuesday that it planned to invest up to $30 billion in OpenAI's for-profit subsidiary and syndicate the remaining $10 billion to co-investors. The deal values OpenAI at $300 billion, up from $157 billion in a funding round late last year.

Artificial-intelligence company OpenAI is currently structured as a nonprofit company with a board that oversees its for-profit business. It intends to become a for-profit public-benefit corporation, The Wall Street Journal reported, citing people with knowledge of its plans.

OpenAI has to complete that transition by the end of the year or SoftBank can reduce the funding round to $20 billion, according to The Wall Street Journal.

That puts pressure on the timeline for the complicated negotiations over the share of the company that early backers such Microsoft will receive.

Microsoft has pumped $13 billion into OpenAI since 2019. However, Microsoft has lessened its dependence on the company by setting up an in house AI unit, while OpenAI has struck deals with other companies such as Oracle for computing power.

"The rapidly souring relationship between Microsoft and OpenAI means that if conflicts emerge, there is now a large and grumpy shareholder capable of making a lot of trouble," wrote independent analyst Richard Windsor, who publishes Radio Free Mobile.

OpenAI said in a statement announcing the funding round that 500 million people use ChatGPT every week. OpenAI CEO Sam Altman said in a post on social-media site X on Monday that the chatbot platform added one million users in a single hour amid widespread use of its upgraded image-generation tool.

In January, SoftBank and OpenAI announced a plan to invest up to $500 billion in AI infrastructure in the U.S., together with other partners including Oracle. The joint venture, called Stargate, will build data centers for OpenAI.

SoftBank has invested $2.2 billion in OpenAI through SoftBank Vision Fund 2 since September. The first $10 billion investment of the latest funding round is planned for mid-April with the rest coming in December, SoftBank said.

Barron's owner News Corp has a content-licensing partnership with OpenAI.

Write to Adam Clark at adam.clark@barrons.com

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April 01, 2025 08:31 ET (12:31 GMT)

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