SoftBank Deepens Investment in OpenAI with $1.5 Billion Employee Share Buyout

SoftBank seeks to buy $1.5 billion OpenAI shares from employees

SoftBank Group is aiming to increase its stake in OpenAI by acquiring up to $1.5 billion in shares from the startup's employees, according to people familiar with the matter. The company will make a tender offer for the stock, allowing OpenAI employees to cash in shares if they choose. SoftBank contributed $500 million to OpenAI's $6.6 billion fundraising round in October, but had pushed for a larger allocation at the time, said one of the people, asking not to be named because the negotiations aren't public. SoftBank founder Masayoshi Son has vowed to step up investments in artificial intelligence as his Tokyo-based company regains its financial footing after years of missteps. OpenAI, which jumped out to early leadership in the field with its ChatGPT product, was valued at $157 billion in the last fundraising. It's not yet clear how much stock SoftBank will be able to buy from OpenAI's employees, who may choose to hold onto their shares if they forecast bright prospects ahead. SoftBank and OpenAI didn't respond to requests for comment outside of normal business hours. The SoftBank tender offer is set to close this week, according to CNBC, which first reported the news.

SoftBank Secures Bigger OpenAI Stake With $1.5B Employee Share Buyout: Report - Microsoft (NASDAQ:MSFT), NVIDIA (NASDAQ:NVDA)

OpenAI enables employees to sell up to $1.5 billion worth of shares in a tender offer led by SoftBank Group SFTBY SFTBF. What Happened: The transaction, set to close by Dec 24, allows SoftBank to deepen its stake in the AI leader while offering liquidity to current and former employees, reported CNBC, citing people familiar with the matter. The deal, priced at $210 per share, aligns with OpenAI's recent $157 billion valuation. SoftBank CEO Masayoshi Son drove the move, following a $500 million investment in OpenAI's last funding round. This marks another step in Son's aggressive AI strategy, with SoftBank's Vision Fund 2 also backing startups like Glean and Perplexity. OpenAI, backed by $13 billion in funding from investors including Microsoft Corp MSFT and NVIDIA Corp NVDA, has emphasized the importance of such tender offers amid a dormant IPO market. This initiative reflects the company's commitment to employee satisfaction and continued capital-raising to sustain its growth in the competitive generative AI market. SoftBank and OpenAI did not immediately respond to Benzinga's request for comment. Read Next: BlackRock Set To Acquire Private Credit Manager HPS For $12B: Report Image Via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

OpenAI employees to sell $1.5 bln in shares to SoftBank- CNBC By Investing.com

Investing.com-- OpenAI will allow its employees to sell about $1.5 billion worth of shares to Japan's SoftBank Group Corp. (TYO:9984) in a new tender offer, CNBC reported on Wednesday, as the AI startup courts more high-profile investors. The deal was struck by SoftBank CEO and founder Masayoshi Son, who was seeking a larger stake in OpenAI, CNBC reported. Son had invested $500 million in OpenAI's previous funding round. Current and former OpenAI employees will have until December 24 to participate in the offer, the CNBC report said. The offer is not related to the AI start-up's plans to transition into a for-profit venture. The $1.5 billion tender adds to OpenAI's recent $6.6 billion funding round, which valued the firm at about $157 billion, reports showed earlier this year. OpenAI is still a privately held company and is not privy to disclosing its financials. The report comes after SoftBank vowed to "aggressively" increase its investments in artificial intelligence, citing high potential in the fast-growing technology. The technology conglomerate also reportedly has plans to start its own AI ventures. SoftBank also has investments in AI startups Glean, Perplexity and Poolside through its Vision Fund. The Japanese tech giant is the latest high-profile investor to clinch a large stake in OpenAI, which has ballooned in value after the launch of its ChatGPT tool in late-2022.

OpenAI gets new $1.5 billion investment from SoftBank, allowing employees to sell shares in a tender offer

Sam Altman, chief executive officer of OpenAI, during an event in Seoul, South Korea, on Friday, June 9, 2023. OpenAI is allowing employees to sell roughly $1.5 billion worth of shares in a new tender offer to SoftBank, CNBC has learned. The new financing will allow the Japanese tech conglomerate to get an even larger slice of the AI startup, and it will allow current and former OpenAI employees to cash out their shares, two people familiar with the matter told CNBC. The new tender offer, which has not been previously reported, is set to close this week, a person familiar with the matter said. The deal was spurred by SoftBank billionaire founder and CEO Masayoshi Son, who was persistent in asking for a larger stake in the startup after putting $500 million into OpenAI's last funding round, a person familiar with the matter said. The tender offer is not related to OpenAI's potential plans to restructure the firm to a for-profit business, one of the people said. OpenAI and SoftBank declined to comment. The news underscores Son's interest in the AI space and in backing the most valuable private players. SoftBank was an early investor in Arm, and Son said at a recent conference that he's saving "tens of billions of dollars" to make the "next big move" in artificial intelligence. He had previously invested in Apple, Qualcomm and Alibaba. SoftBank's Vision Fund 2 recently invested in AI startups Glean, Perplexity and Poolside. SoftBank has about 470 portfolio companies and $160 billion in assets across its two vision funds. The OpenAI investment matches SoftBank's eagerness to deploy cash, with a capital-intensive business model, a person close to Son told CNBC. Even without SoftBank's deep pockets, OpenAI has had no trouble raising billions in cash. Its valuation has climbed to $157 billion in the two years since launching ChatGPT. OpenAI has raised roughly $13 billion from Microsoft, and it closed its latest $6.6 billion round in October, led by Thrive Capital and including participation from chipmaker Nvidia, SoftBank and others. The company also received a $4 billion revolving line of credit, bringing its total liquidity to more than $10 billion. OpenAI expects about $5 billion in losses on $3.7 billion in revenue this year, CNBC confirmed in September with a person familiar with the situation.

OpenAI Employees Can Sell $1.5 Billion in Stock to SoftBank

ChatGPT-owner OpenAI is allowing its employees to sell roughly $1.5 billion worth of shares in a new tender offer to Japan's SoftBank Group, two sources familiar with the matter told Reuters on Wednesday. SoftBank's billionaire CEO Masayoshi Son has been persistent in seeking a larger stake in the startup after investing in the last funding round, according to CNBC, which first reported the news. The Microsoft-backed artificial intelligence start-up raised $500 million from the Japanese conglomerate, according to a media report, in a $6.6 billion funding round in October at a valuation of $157 billion. OpenAI employees will have until Dec. 24 to decide if they want to participate in the new funding round, a source told Reuters, adding that the stock's offer price aligns with the company's last funding round. The investment will come from SoftBank's Vision Fund 2, another source said. The sources declined to be named as they were not authorized to speak to the media. SoftBank and OpenAI declined to comment.

OpenAI allows employees to sell shares worth $1.5 billion to SoftBank

Employees have until December 24 to decide whether to participate in the newly disclosed tender offer. The deal was reportedly driven by SoftBank's billionaire founder and CEO Masayoshi Son, who pressed for a larger stake in the startup after putting $500 million into OpenAI's last funding round.OpenAI is letting its employees sell shares worth around $1.5 billion to SoftBank, CNBC reported. The move will allow the Japanese tech conglomerate to increase its stake in the ChatGPT maker, and will provide an opportunity for current and former employees of OpenAI to liquidate their shares, the report said, citing sources familiar with the matter. Employees have until December 24 to decide whether to participate in the newly disclosed tender offer. The deal was reportedly driven by SoftBank's billionaire founder and CEO Masayoshi Son, who pressed for a larger stake in the startup after putting $500 million into OpenAI's last funding round. Son is currently in India, and met Reliance Industries chairman Mukesh Ambani on Tuesday. He is meeting Prime Minister Narendra Modi on Wednesday. What's behind the move? The development highlights Son's interest in the AI sector and his focus on backing the most valuable private players in the space. SoftBank was an early backer of Arm, and Son recently stated at a conference that he is reserving "tens of billions of dollars" for what he calls the "next big move" in artificial intelligence. The investment in OpenAI reflects SoftBank's aggressive strategy to deploy capital, particularly into businesses with high cash requirements, according to a source familiar with Son's plans. Earlier, Clavel told ET that SoftBank will plough $500 million into Sam Altman's OpenAI, valuing the maker of ChatGPT at $150 billion. OpenAI employees can cash out The tender offer will allow current and former OpenAI employees to cash out their shares, provided they were granted restricted stock units at least two years ago and have held them for that duration. Shares will be priced at $210 per unit, aligning with the company's latest funding round. Competitive landscape The generative AI market is predicted to surpass $1 trillion in revenue over the next decade. Rivals like Anthropic and Google are ramping up efforts, while Microsoft integrates OpenAI's tools into its own ecosystem. In response, OpenAI recently launched a search engine feature in ChatGPT, positioning it to challenge traditional search engines like Google and Bing. SoftBank's India portfolio SoftBank portfolio firms FirstCry, Ola Electric, Swiggy, and Unicommerce have gone public this year. Son's prior investments include major names like Qualcomm, Apple, and Alibaba. Beyond these big firms, SoftBank has also made an uncharacteristically small investment in the wearable startup Ultrahuman. The multinational investment holding company holds a portfolio of about 470 companies, managing $160 billion in assets across its two vision funds.

SoftBank boosts OpenAI stake with $1.5bn investment

SoftBank is buying up $1.5bn worth of stock in OpenAI, bolstering its position in the $150bn artificial intelligence company as Masayoshi Son seeks to position the Japanese group as an artificial intelligence leader. SoftBank is buying the shares through a tender offer, a mechanism which allows current and former OpenAI employees who have held their stock for more than two years to sell, according to two people familiar with the situation. The deal is set to close early next year. The tender offer, first reported by CNBC, prices employee stock according to OpenAI's last funding round, which was completed last month. That $6.6bn fundraise valued the company at $150bn. SoftBank's second Vision Fund, its tech-heavy investment vehicle, invested $500mn in the company during that round. The same fund, in which Son has a substantial stake, is also buying the $1.5bn in shares. AI start-ups have raised tens of billions in debt and equity this year, as investors look past eye-watering valuations for lossmaking companies to make bets on the technology. Elon Musk is expected to close a $5bn funding round for his AI start-up xAI this week, to value the year-old group at $45bn, while OpenAI's valuation has nearly doubled this year. Last week, rival Anthropic received a second $4bn investment from Amazon. Son has publicly expressed his admiration for Sam Altman and has said he frequently talks to the OpenAI chief executive. The tech investor has been seeking a larger stake in the company, according to people familiar with the matter. SoftBank's additional investment makes the company one of OpenAI's largest backers alongside Josh Kushner's Thrive Capital, which has poured more than $1bn into the group. Tiger Global, Altimeter Capital, Coatue Management and Abu Dhabi-based tech investment firm MGX have also made substantial bets on the company. Microsoft, OpenAI's most important partner, has invested more than $13bn. Son is currently trying to execute an ambitious AI plan to put his company at the centre of developments in artificial intelligence. "This is what I was born to do, to realise ASI [artificial super intelligence]," said Son earlier this year. The group is the majority owner of Arm Holdings, the UK-based chip designer that has been a beneficiary of the AI boom and is central to Son's AI ambition.

SoftBank Reportedly Eyeing $1.5 Billion OpenAI Stock Purchase | PYMNTS.com

SoftBank reportedly wants to purchase $1.5 billion in OpenAI stock. It's part of an effort by SoftBank Group CEO Masayoshi Son to strengthen the company's stake in OpenAI and position it as an artificial intelligence (AI) leader, the Financial Times (FT) reported Wednesday (Nov. 27). SoftBank will purchase the shares via a tender offer, allowing current and former OpenAI employees who have held their stock for more than two years to sell, sources familiar with the situation told the FT. The tender offer prices employee holdings by OpenAI's most recent funding round, which happened last month, raising $6 billion and valuing the firm at $150 billion. SoftBank Vision Fund invested $500 million in that round, the report said, and will purchase this new set of shares. As the FT notes, this year has seen AI startups raise tens of billions this year, with investors taking a chance on the technology, if not the loss-making companies behind it. Elon Musk is set to close a $5 billion funding round for his xAI this week -- valuing that company at $45 billion -- while Amazon recently invested another $4 billion into OpenAI rival Anthropic. As for SoftBank, its CEO has been open about his admiration of OpenAI chief Sam Altman, and -- sources told the FT -- has been looking to purchase a bigger stake in the AI firm. Son wants his company to play a larger role in the broader AI industry, and eventually in the development of artificial super intelligence (ASI). "This is what I was born to do, to realize ASI," he said earlier this year. Enterprise spending on generative AI increased by sixfold this year, jumping from $2.3 billion in 2023 to $13.8 billion, venture capital firm Menlo Ventures said last week. "2024 marks the year that generative AI became a mission-critical imperative for enterprise," Joff Redfern, partner at Menlo, said in a news release. "The numbers tell a dramatic story of organizations moving beyond pilots to embedding AI at the core of their business strategies." The firm found that nearly three-quarters of enterprise IT decision-makers from companies with 50 or more employees anticipate broader adoption of generative AI in the near term. Meanwhile, the financial industry is at the brink of a major shift as AI tools are folded into banking, according to the PYMNTS Intelligence and NCR Voyix collaboration, "Is AI the Master Key to Banking's Next Era?" The report showed that 72% of leaders in the finance space report they are using AI in their operations.

SoftBank could increase its stake in OpenAI by $1.5 billion

Donald Trump's best and worst cabinet picks, according to an analyst The artificial intelligence startup is letting employees sell about $1.5 billion in shares to the Japanese investment firm in a tender offer, CNBC (CMCSA+0.45%) reported, citing unnamed people familiar with the matter. OpenAI's current and former employees granted restricted stock units in the last two years reportedly have until December 24 to decide if they want to cash out their shares. The investment firm's Vision 2 fund is reportedly working on the deal, a move that would increase its stake in the AI startup. SoftBank chief executive Masayoshi Son is pushing for the tender offer after repeatedly asking for a larger stake in OpenAI, a person told CNBC. The Japanese firm invested $500 million in OpenAI's $6.6 billion funding round in October that valued the startup at $157 billion. Neither OpenAI nor SoftBank immediately responded to a request for comment from Quartz. The Japanese firm's tender offer is reportedly not related to OpenAI's potential restructuring plans that would turn it from a nonprofit to a for-profit organization. Meanwhile, OpenAI is reportedly spending more than it's making. In September, the New York Times (NYT+0.02%) reported that OpenAI expects to end the year with $3.7 billion in annual sales, according to financial documents it reviewed. The review also showed that the startup anticipates losing around $5 billion this year due to expenses such as running its AI models and paying employees. Next year, OpenAI reportedly expects $11.6 billion in revenue.

OpenAI secures $1.5B funding from SoftBank, allows employees to cash out

OpenAI, the artificial intelligence company behind ChatGPT, has received a $1.5 billion investment from SoftBank Group through a tender offer allowing the purchase of shares from current and former OpenAI employees. The offer will enable OpenAI employees to cash out restricted stock units at $210 per share, allowing employees and stakeholders to receive liquidity during limited initial public offering (IPO) opportunities in tech. The deal was reportedly driven by SoftBank's billionaire founder and CEO, Masayoshi Son, who has shown consistent interest in acquiring a larger stake in the AI company, a person familiar with the matter told CNBC. The funding strengthens OpenAI's financial resources to advance its AI development while offering liquidity to its stakeholders amid limited IPO opportunities. Related: OpenAI's Sora text-to-video tool leaked by aggrieved beta testers SoftBank expands AI-focused investments The investment is part of SoftBank's broader strategy to expand its portfolio in artificial intelligence. In October, it participated in a $6.6 billion funding round for OpenAI. The tender offer aligns with the Japanese conglomerate's strategy of investing in and supporting firms that offer forward-thinking tech. In July, SoftBank invested in another AI firm that aims to retrofit various machines and robotics devices with "general-purpose" brains. Related: Elon Musk 'shot down' OpenAI's ICO plan in 2018 over credibility concerns OpenAI Sora text-to-video tool leak OpenAI's unreleased Sora text-to-video tool was recently leaked by beta testers and artists who made allegations of exploitation during its developmental phase. The group published access to the unreleased tool online, accusing OpenAI of unpaid labor and a lack of recognition for their contributions. While OpenAI has since shut down access to the leaked tool, the incident has fueled ongoing discussions about ethical practices in AI research and development. Related: OpenAI in talks with regulators to become a for-profit company: Report Copyright lawsuit dismissal On Nov. 7, a United States federal judge dismissed a copyright lawsuit against OpenAI, filed by news outlets for the alleged misuse of articles in training the firm's popular ChatGPT tool. Although OpenAI was cleared for insufficient evidence of harm, the plaintiff's lawyers stated that they plan to refile the case with additional documentation that they said was "certain" to address the court's concerns. Magazine: Make Ethereum feel like Ethereum again: Based rollups explained