OpenAI, the San Francisco artificial intelligence company that has been on a yearslong money-raising frenzy, is in talks with the Japanese conglomerate SoftBank for an investment up to $25 billion, according to three people familiar with the negotiations.
Some of that money could be used to cover OpenAI’s commitment to Stargate, the $100 billion data center project announced at the White House last week, the people said. But the money would be separate from the investment SoftBank is already putting into that project.
The sources, who requested anonymity because the talks were confidential, stressed that discussion around the terms of the investment are still ongoing. One person familiar with the negotiations said the deal could value OpenAI in the vicinity of $250 billion, while another put the valuation closer to $340 billion. The larger figure would make OpenAI the second most valuable private company in the world, just behind Elon Musk’s SpaceX, according to CB Insights, which tracks start-ups.
Stargate, a joint venture of SoftBank, OpenAI and the software company Oracle, could result in $500 billion of investment in computing infrastructure, the companies have said.
The negotiations were reported earlier by the Financial Times.
OpenAI started the A.I. boom in late 2022 with the release of its online chatbot, ChatGPT. But the company has had an unusually tumultuous few years since then.
Executives are still trying to repair OpenAI’s reputation after its board of directors unexpectedly fired its chief executive, Sam Altman, about a year after ChatGPT was released. He was reinstated five days later, but OpenAI has lost several prominent employees since then, including Ilya Sutskever, its chief scientist and a co-founder.
In October, OpenAI completed a $6.6 billion fund-raising deal that valued the company at $157 billion, nearly doubling the high-profile company’s valuation from just nine months earlier. SoftBank was part of that deal.
In December, OpenAI unveiled new A.I. technology called OpenAI o3. But not long after, a little-known Chinese start-up called DeepSeek shocked the tech industry with the release of an A.I. system that could match leading A.I. products made in the United States.
The Chinese company said it built its new A.I. technology at a lower price and with fewer hard-to-get computer chips than its American competitors, challenging an industrywide belief that bigger and better A.I. would cost many billions of dollars. OpenAI said on Wednesday that it was investigating whether DeepSeek may have improperly harvested OpenAI’s data to help build its own systems.
(The New York Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement of news content related to A.I. systems. OpenAI and Microsoft have denied those claims.)
Since DeepSeek asserted that it could build A.I. more affordably, there have been questions about the wisdom of investing hundreds of billions of dollars in new data centers. But many experts believe massive amounts of computing power will continue to provide companies like OpenAI with an edge in the market.
With more chips, they can explore new ways of building artificial intelligence. In other words, more chips can still give companies a technical and competitive advantage. More chips will also be needed to operate the new “reasoning” A.I. models like OpenAI o3. These require more computing power when people and businesses use them.
Erin Griffith contributed reporting.
