SoftBank Eyes $500M Investment in OpenAI After Apple's Exit

After Apple Reportedly Backed Out, SoftBank Eyes $500M Investment In ChatGPT Parent, Pushing Valuation To $150B - Microsoft (NASDAQ:MSFT), SoftBank Group (OTC:SFTBF)

Masayoshi Son-led SoftBank Group Corporation SFTBF has reportedly re-committed to a $500 million investment in ChatGPT-parent OpenAI. What Happened: This investment forms part of a larger $6.5 billion funding round, catapulting OpenAI's valuation to a staggering $150 billion, reported Financial Times, citing two people with knowledge of the deal. The investment will be made through SoftBank's second Vision Fund, primarily backed by the personal wealth of the company's leader, Son. See Also: OpenAI's SearchGPT Set To Disrupt Google's Search Empire As Former Engineer Sounds Alarm On Deteriorating User Experience Amid Rising Competition This move will add SoftBank to the list of existing investors, which includes Thrive Capital and Microsoft Corporation MSFT. Despite the high-profile departures from OpenAI and potential corporate restructuring, investors remain optimistic about the company's ability to push the boundaries of AI technology, the report noted. They are betting on OpenAI's potential to outperform big tech rivals like Google and Meta, as well as startups such as Anthropic and Mistral. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Why It Matters: Son has previously referred to himself as an avid user of OpenAI's chat service and has formed a strong connection with the company's CEO, Sam Altman. He considers Altman to be one of the most influential figures in the world and has said that they communicate daily. SoftBank already works with OpenAI in Japan, helping local businesses create advanced chatbots. Last month, Apple design legend Sir Jony Ive also confirmed his collaboration with OpenAI on a new AI hardware project. Earlier, it was reported that Altman and Ive are seeking to secure $1 billion in funding from SoftBank for their new venture. Meanwhile, Apple has reportedly pulled out of talks to invest in OpenAI's upcoming funding round. The withdrawal occurred at the last minute, just ahead of the funding round's expected closure. Image via ChatGPT Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Apple's Satellite Messaging Feature Emerges As Lifeline After Hurricane Helene Leaves Thousands Without Cell Phone Service: Here's How You Can Use It Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

SoftBank expected to invest $500M in OpenAI as Apple exits funding round - SiliconANGLE

SoftBank expected to invest $500M in OpenAI as Apple exits funding round SoftBank Group Corp. plans to invest $500 million in OpenAI as part of a forthcoming funding round, The Information reported today. A source told the publication that the cash infusion will give the ChatGPT developer a pre-money valuation of $150 million. That's up from the $86 billion OpenAI was reportedly worth following a tender offer earlier this year. Rumors that the artificial intelligence provider is raising new capital have been swirling for months. The round, which is expected to be worth up to $6.5 billion, will reportedly close within a week. It's believed that OpenAI will receive the capital in the form of convertible notes, a type of debt that lenders can turn into shares down the road. A SoftBank investment could potentially create an opportunity for the companies to collaborate on product development initiatives. SoftBank is the majority stakeholder in Arm Holdings plc and recently acquired chip startup Graphcore Ltd. According to the Financial Times, the company hopes to use its semiconductor assets to enter the AI processor market. OpenAI, meanwhile, is reportedly seeking to collaborate with a chipmaker on designing a custom AI accelerator for its machine learning clusters. Besides SoftBank, the ChatGPT developer's new funding round is also expected to include the participation of Microsoft Corp. The tech giant previously provided OpenAI with about $13 billion worth of capital and cloud infrastructure. Microsoft is expected to up its OpenAI stake by another $1 billion. Recent reports suggest that the other participants in the round will include Tiger Global, Coatue and Thrive Capital. The latter firm is reportedly poised to become the lead investor with a contribution exceeding $1 billion. Moreover, Thrive will receive an option to invest another $1 billion next year at the same valuation. Nvidia Corp. may reportedly participate as well and, until a few days ago, it was believed that Apple Inc. could also become an OpenAI investor. Last Friday, the Wall Street Journal reported that the iPhone maker has decided against joining the round. It earlier gave up an observer seat on OpenAI's board. The report didn't specify why Apple exited the funding round. It's unclear whether the move will affect the iPhone maker's product partnership with OpenAI, which focuses on a suite of upcoming iOS features called Apple Intelligence. One of the upcoming capabilities will allow Siri to have ChatGPT answer some user questions. Last week, Reuters reported that OpenAI's funding round will only close at a $150 billion pre-money valuation if the AI developer changes its organizational structure. Currently, OpenAI operates as a nonprofit. Its AI development efforts are led by a for-profit arm that launched in 2019. The ChatGPT developer reportedly plans to restructure its for-profit arm as a benefit corporation. Additionally, OpenAI intends to remove caps that limit the maximum return its investors can realize on their stakes.

SoftBank to Invest $500 Million in OpenAI: Report

Before SoftBank's investment OpenAI is currently valued at $150 billion Japanese telecom company SoftBank's Vision Fund will invest $500 million (roughly Rs. 4,190 crore) in OpenAI's latest funding round, The Information reported on Monday, citing a person familiar with the deal. SoftBank declined to comment, while OpenAI did not immediately respond. The company at the heart of the Artificial Intelligence (AI) boom is raising $6.5 billion (roughly Rs. 54,478 crore) in the form of convertible notes, Reuters exclusively reported earlier this month. Apple reportedly dropped out of plans to participate in the large funding round, which currently values the AI startup at $150 billion (roughly Rs. 12,57,187 crore) before the SoftBank investment. However, the valuation will be contingent on whether the ChatGPT-maker can upend its corporate structure and remove a profit cap for investors. The deal represents SoftBank's first investment in the Sam Altman-led firm, the Information report said. Reuters reported on Wednesday that OpenAI is working on a plan to restructure its core business into a for-profit corporation that will no longer be controlled by its non-profit board.

SoftBank to Invest $500M in OpenAI for the First Time -- Is It Late to the Party?

Even at a $150 billion valuation, analysts believe OpenAI still has room to grow. SoftBank (SFTBF) is looking to invest in OpenAI for the first time. The Japanese conglomerate helmed by billionaire Masayoshi Son has reportedly agreed to chip in $500 million via its second Vision Fund in a round that values the ChatGPT maker at a staggering $150 billion, The Information reported today (Sept. 30). The round is set to be led by Thrive Capital, which is investing $1 billion. Other participants could include Microsoft (MSFT), Nvidia (NVDA), Tiger Global Management and the United Arab Emirates-backed fund MGX. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters SoftBank's involvement would represent one of Son's most significant bets on A.I. so far. It would also follow missteps made by the conglomerate's first Vision Fund, which infamously backed WeWork and suffered heavy losses after its collapse in 2023. Until now, Son's most notable A.I. investment has been SoftBank's majority ownership of Arm, a U.K.-based chip designer. SoftBank in May reported a $4.6 billion gain for its Vision Funds for the fiscal year, largely driven by Arm's 2023 IPO. In the past few years, the conglomerate has been on "defense mode," said Son during SoftBank's 2023 annual shareholder meeting last June. "Three years ago, we didn't have a lot of cash on hand," said Son at the time, noting that SoftBank has since amassed more than $35 billion. "We are ready to shift to offense mode," he declared, adding his primary interest was playing a large role in the "A.I. revolution." Besides partaking in an investment round for Perplexity AI, an A.I.-driven search engine, earlier this year, the company has largely taken a backseat to A.I. startups and reportedly passed on investments in OpenAI competitors like Mistral AI, Anthropic and Cohere. Its willingness to back OpenAI, however, should come as no surprise -- Son has repeatedly sung the praises of the company, stating that he is a "heavy user of ChatGPT" and calling OpenAI CEO Sam Altman "one of the key people on Earth." SoftBank and OpenAI did not respond to requests for comment from Observer regarding SoftBank's investment. Is SoftBank late to the A.I. party? SoftBank's bet on OpenAI is quite late by venture capital standards, given its already colossal valuation. But the high-flying A.I. company still has room for growth, according to analysts. The company hit $3.4 billion in annualized revenue in June and is "progressing towards $5 billion in annual recurring revenue, driven primarily by its ChatGPT product," Brendan Burke, PitchBook's senior emerging technology analyst, told Observer via email. PitchBook estimates OpenAI is set to benefit from a generative A.I. software market that is on pace to double next year and exceed $30 billion, he added. "This revenue growth supports further valuation growth, which encourages employees to remain at the company and progresses toward the trillion-dollar valuation that CEO Sam Altman believed the company can grow into," said Burke. SoftBank's investment comes at a time of uncertainty for OpenAI. The company last week lost three top executives, and Altman is reportedly planning a restructuring that will change the company's capped-profit model. "Leadership changes are a natural part of companies, especially companies that grow so quickly and are so demanding," said Altman in a post on X announcing the recent departures.

OpenAI to Receive $500 Million Investment From SoftBank, The Information Reports

---SoftBank's Vision Fund is set to pour half a billion dollars into OpenAI as part of a funding round that values the ChatGPT developer at $150 billion prior to the investment, The Information reported, citing unnamed sources. --The deal, which would mark SoftBank's first investment in the AI firm, also involves Microsoft and lead investor Thrive Capital, The Information reported. --SoftBank declined to comment on the matter. --OpenAI did not immediately respond to a request for comment. --News Corp, owner of The Wall Street Journal and Dow Jones Newswires, has a content-licensing partnership with OpenAI. Full story: bit.ly/47Pn3Fl Write to Singapore Editors at singaporeeditors@dowjones.com

SoftBank to invest $500mn in OpenAI

George Hammond in San Francisco and Madhumita Murgia in London Masayoshi Son's SoftBank will invest $500mn into OpenAI as part of a fundraising round that is expected to close this week and value the artificial intelligence start-up at $150bn. SoftBank will invest via its second Vision Fund, a large vehicle for backing start-ups, which is now mainly made up of Son's personal wealth, according to two people with knowledge of the deal. SoftBank will join existing investors, including venture fund Thrive Capital and Microsoft in a $6.5bn funding round, which is expected to close in the coming days, according to people familiar with the discussions. The Japanese group was one of the most prolific start-up investors in the years leading up to 2022, during which time the valuation of young technology companies spiralled higher, often to unsustainable levels. SoftBank's roughly $14bn investment into WeWork and Son's close relationship with its founder Adam Neumann became emblematic of the excesses of that period after the co-working company collapsed from a peak valuation of $47bn in 2019. After a period of retrenchment, SoftBank has ratcheted up its investments into AI, with Son declaring it was time "to go on the counteroffensive" to take advantage of the new technology. SoftBank is the majority owner of UK chip designer Arm, and Son has spoken about his ambition to use it as the centrepiece in a network of companies advancing AI. OpenAI is finalising the details of one of the biggest-ever private funding rounds against a chaotic backdrop. The company's chief technology officer Mira Murati unexpectedly left the San Francisco-based company last week, along with Bob McGrew, chief research officer, and Barret Zoph, vice-president of research. They are the latest in a series of senior departures this year that have stripped OpenAI of the majority of its founding team and its most prominent safety researchers. The company is also exploring a corporate restructure that would do away with its current novel arrangement, in which investors take a stake in a for-profit subsidiary of the company, governed by a not-for-profit board, according to people with knowledge of the discussions. OpenAI's chief executive Sam Altman has discussed taking a direct equity stake in the company for the first time as part of those plans, they added. But many investors appear undeterred and still willing to commit to a company that has continued to push the frontier of AI technology. They are betting that OpenAI can see off competition from Big Tech rivals including Google and Meta, as well as start-ups such as Anthropic and Mistral. SoftBank's participation in the round was first reported by The Information SoftBank and OpenAI declined to comment.

OpenAI Reportedly Slated for $500 Million SoftBank Investment | PYMNTS.com

Japan's SoftBank is reportedly planning to invest in OpenAI's multi-billion dollar funding round. The $500 million investment would come from the bank's Vision Fund, The Information reported Monday (Sept. 30), citing a source familiar with the matter. The news follows recent reports that OpenAI was in talks to raise $6.5 billion in a funding round that would bring the company's valuation to $150 billion. Microsoft, the artificial intelligence (AI) startup's biggest backer, is slated to take part. This weekend also saw a pair of reports dealing with the funding round, including one from the New York Times citing documents OpenAI has been sharing with investors, showing the company's revenues up 1,700% since last year. However, the same documents show that the company expects to lose roughly $5 billion this year after paying for operational costs, salaries and overhead. Meanwhile, The Wall Street Journal reported that Apple had stepped back from plans to take part in the funding round. As PYMNTS wrote last week, OpenAI's fundraising plan brings about a new era for the commercialization of artificial intelligence, one that has the potential to reshape whole industries while leading to a battle for market dominance. The company's updated valuation, which doesn't take into account the funds being raised, marks a leap from the $86 billion figure cemented during OpenAI's tender offer earlier in the year. This financing round, if successful, would seal OpenAI's status as one of the world's most valuable startups and usher in a seismic shift in the AI space. "We're seeing a consolidation of capital around clear winners in the general LLM [large language model] space -- OpenAI, Perplexity, Mistral, LLaMA," Hannah Chelkowski, co-founder and general partner at Blank Ventures, told PYMNTS. "This funding round further cements OpenAI's position as a leader in this space." Assuming this sea change happens, it could have wide-ranging commercial implications for businesses in a variety of industries. "Companies successfully leveraging OpenAI's technology may gain substantial competitive advantages, potentially disrupting traditional business models and reshaping entire markets," PYMNTS wrote. "Observers say the AI fundraising effort could trigger a surge in AI-powered products and services across a range of sectors." For example, retailers could offer more sophisticated chatbots and personalized shopping experiences, while financial institutions could update their fraud detection measures.

SoftBank To Invest $500M In OpenAI -- Report

The investment would be SoftBank's first in OpenAI and comes more than a year after SoftBank founder Masayoshi Son told investors the fund would be switching back to "offense mode" and was looking to be a leader in the AI revolution after it had suffered massive losses for quarters. OpenAI played a role in Son's desire to jump on the AI bandwagon. Son, who spoke very emotionally to shareholders at that meeting last year, said he has cried for years when thinking about his future and what he wanted to do with the time he has left. However, he said the recent advances in artificial intelligence rekindled his desire for investing in technology -- and he particularly referenced conversing with OpenAI's generative AI language processing platform ChatGPT to discuss his ideas and thoughts. He said he was heartened by those conversations and when the platform told him those ideas were feasible.

SoftBank's Masa Son Nears His Next Big Bet: OpenAI

SoftBank weighs its next big A.I. bet SoftBank's outspoken founder and C.E.O., Masa Son, has long talked about wanting to become a giant in artificial intelligence. Now, the Japanese technology investor is poised to take a stake in OpenAI, perhaps the most prominent A.I. player around, DealBook's Michael de la Merced hears. If a deal happens, it would finally link two of the most ambitious tech companies around. What's happening: SoftBank's Vision Fund unit plans to put about $500 million into OpenAI's latest huge fund-raising round. (Son's plans were first reported by The Information.) That said, SoftBank isn't leading the round: Josh Kushner's Thrive Capital is, with the venture capital firm planning to commit about $750 million, as well as $450 million from a new special purpose fund raised for the investment. SoftBank has been interested in OpenAI for some time. Last year, Son -- who says he uses ChatGPT every day -- is said to have met with Sam Altman, the A.I. start-up's C.E.O., about potential ties. That included talks for Son to provide up to $1 billion in funding to Altman and Jony Ive, the designer behind the iPhone, to create an A.I.-powered replacement for the smartphone. Bloomberg reported that SoftBank had hoped to be part of OpenAI's last fund-raising round, but was instead wait-listed. It's not hard to understand SoftBank's interest. Son tends to couch his investment theses in lofty language, telling investors last year that he wanted SoftBank to be "an architect to build the future of humankind." And Altman has pushed governments and tech giants to create gigantic data centers around the world to supply A.I. companies with reservoirs of computing power.

Top Tech News: SoftBank Plans to Invest US$500 Million in OpenAI; Tetherball Utility Memecoin Launches $TBALL for Cryptocurrency-Powered E-Commerce

Japan's SoftBank is reportedly planning to invest in OpenAI's multi-billion dollar funding round. OpenAI is in discussions to secure US$6.5 billion in funding, which would increase the company's worth to US$150 billion. Microsoft, the leading investor in the artificial intelligence startup, is expected to be involved. Meanwhile, The Wall Street Journal reported that Apple had stepped back from plans to take part in the funding round. OpenAI's strategy for raising funds is ushering in a new phase for the commercial use of artificial intelligence, potentially transforming entire sectors and sparking a competition for market supremacy. Success in this funding round could establish OpenAI as one of the most valuable startups globally and lead to a major shift in the artificial intelligence industry. This investment is SoftBank's debut in the firm led by Sam Altman, according to the Information report. Reuters reported on Wednesday that OpenAI is in the process of planning a restructuring of its main operations into a for-profit entity that will no longer be overseen by its non-profit governing board.