OpenAI reportedly gearing up for new funding round led by SoftBank

OpenAI is reportedly in talks to secure up to $40 billion in a new funding round led by SoftBank, a move that could push the AI startup’s valuation to an astounding $340 billion. According to The Wall Street Journal, SoftBank is expected to invest between $15 billion and $25 billion, making it the largest financial backer of OpenAI.

If the deal goes through, it would mark a significant jump from OpenAI’s previous valuation of $157 billion in October 2024. The funding would provide much-needed capital to sustain OpenAI’s ambitious plans, particularly as it contends with heavy losses. In 2024, the ChatGPT maker reportedly lost around $5 billion against revenues of $3.7 billion, and those losses could continue to rise as it scales its operations.

SoftBank, which has also invested in ByteDance (the parent company of TikTok) and chip designer Arm, previously participated in a funding round that valued OpenAI at $157 billion.

Project Stargate

One of OpenAI’s biggest priorities for the new funding is Stargate, a bold initiative to construct AI data centers across the US. Stargate is a joint effort involving OpenAI, SoftBank, and Oracle, and has been hailed by former U.S. President Donald Trump as "the largest AI infrastructure project in history." The project’s initial budget is estimated at $100 billion.

Competitive pressures from China

Chinese AI startup DeepSeek has been shaking the industry for the past couple of weeks, and OpenAI will be looking to restore its competitive edge. Just last week, DeepSeek launched its free chatbot in the US, and it became the most downloaded app on Apple’s App Store.

While OpenAI CEO Sam Altman initially welcomed the competition, calling DeepSeek “legitimately invigorating,” the company later alleged that Chinese firms were "constantly" leveraging OpenAI's technology to develop rival AI models.

Deal not yet finalized

The Financial Times reports that the SoftBank-led investment proposal has been reviewed by senior executives and OpenAI’s board, but it has yet to be finalized. If completed, the deal would reinforce OpenAI’s dominance in the AI sector while securing critical funding for its ambitious expansion plans.