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OpenAI raises $40 billion in new funding from SoftBank

April 1, 2025

On Monday, 31st March 2025, OpenAI raises $40 billion in new funding from SoftBank to develop advanced AI technologies, valuing the company at $300 billion.

This deal, the largest venture capital funding ever for a startup, is led by Japanese investment giant SoftBank Group and signals a significant push toward the development of advanced AI technologies, including artificial general intelligence (AGI) and artificial superintelligence (ASI).

The deal will bolster the San Francisco-based company’s efforts to “push the frontiers of AI research even further.”

OpenAI emphasised that the partnership with SoftBank will provide the resources needed to build AI systems capable of driving scientific discovery, enabling personalised education, enhancing human creativity, and paving the way toward AGI, a computing platform with human-level intelligence.

SoftBank, for its part, expressed a bold ambition to realise ASI, an intelligence surpassing that of humans, and identified OpenAI as the partner closest to achieving this transformative goal.

Under the terms of the deal, SoftBank will initially invest $10 billion, with an additional $30 billion to follow by the end of 2025, contingent on conditions such as OpenAI transitioning to a for-profit model.

This staggered investment reflects SoftBank’s confidence in OpenAI’s trajectory while allowing flexibility as the AI landscape evolves.

The funding comes just months after OpenAI’s previous round in late 2024, which valued the company at $157 billion, highlighting the rapid escalation of interest and investment in AI technologies.

A shift toward openness amid competitive pressure

In another announcement, OpenAI revealed plans to develop a more open generative AI model, marking a significant shift from its historically closed, proprietary approach. This decision, shared by OpenAI CEO Sam Altman, comes as the company faces mounting competition from open-source rivals such as Meta and DeepSeek.

“We’ve been thinking about this for a long time, but other priorities took precedence. Now it feels important to do,” Altman said in a post on X, signalling a strategic pivot to adapt to market demands.

Historically, OpenAI, alongside other proponents of closed models like Google, has argued that proprietary systems offer greater security and control, reducing risks of misuse by malicious actors or foreign governments.

However, this stance has drawn criticism, notably from Elon Musk, a former OpenAI investor and co-founder who has since parted ways with the company.

Musk has publicly urged OpenAI to “return to the open-source, safety-focused force for good it once was”, reflecting a broader debate within the AI community about accessibility versus security.

The rise of open-source alternatives has intensified pressure on OpenAI. Mark Zuckerberg-led Meta reported earlier this month that its Llama family of models had surpassed 1 billion downloads, offering companies the ability to download and customise the technology for their specific needs.

Similarly, DeepSeek, a Chinese AI startup, disrupted the industry in January with its lower-cost R1 model, which delivered high performance at a fraction of the cost of its American counterparts.

These developments have underscored the appeal of open models, particularly for large companies and governments wary of adopting AI systems over which they lack control, especially where data security is a priority.

ChatGPT’s success fuels ambitious goals

OpenAI’s latest funding triumph builds on the runaway success of ChatGPT, its flagship AI chatbot launched in late 2022, which ignited the generative AI race. The platform has since grown to over 500 million weekly users, cementing OpenAI’s position as a leader in the field.

Recent enhancements, particularly the introduction of advanced image-generation features, have further boosted its popularity. Altman claimed on Monday that these features attracted “one million users” in a single hour, a surge so intense that it reportedly strained OpenAI’s graphics processing units (GPUs), pushing the company’s infrastructure to its limits.

This user growth underscores the immense computational demands of cutting-edge AI development, a key factor driving the need for SoftBank’s substantial investment.

OpenAI has stated that “massive computing power is essential” to achieving AGI, and the $40 billion will likely fund expanded infrastructure, including partnerships like the previously announced Stargate initiative with SoftBank, Oracle, and the U.S. government, aimed at bolstering American AI capabilities.

OpenAI-SoftBank partnership

The OpenAI-SoftBank partnership arrives at a pivotal moment for the AI industry as competition heats up globally. DeepSeek’s cost-effective innovations have raised questions about whether U.S.-based firms like OpenAI can maintain their edge without adapting to new paradigms.

Meanwhile, Meta’s open-source success has highlighted a growing demand for customisable AI solutions, challenging the dominance of closed systems.

Beyond technical and competitive considerations, the pursuit of AGI and ASI raises profound philosophical questions.

AI promises to free up time and automate tasks, but some observers wonder whether it might also diminish human engagement in creative and intellectual pursuits like learning, writing, painting, and exploring the world.

OpenAI’s shift toward openness could address some of these concerns by democratising access to AI tools, though it also amplifies debates over safety and ethical use.

For SoftBank, the investment aligns with its long-term vision of technological transformation, led by CEO Masayoshi Son.

The Japanese conglomerate has a history of bold bets, including its stakes in companies like Arm and earlier investments in OpenAI. Its commitment to injecting up to $40 billion into OpenAI by year-end reflects a calculated gamble on the future of intelligence itself.

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