Softbank to invest $40 billion in OpenAI at $260 billion valuation, reports

Just days after SoftBank and OpenAI revealed a $3 billion AI partnership in Japan, CNBC reports that SoftBank is close to finalizing a massive $40 billion primary investment in OpenAI. This would place OpenAI’s value at a staggering $260 billion before the money, and $300 billion after.

Sources told CNBC’s David Faber that SoftBank plans to distribute the funds over 12 to 24 months, starting as early as this spring. SoftBank may also bring in other investors to contribute up to $10 billion of that total.

This investment would make SoftBank OpenAI’s biggest financial supporter, surpassing Microsoft. OpenAI’s previous valuation, from private investors in October, was $157 billion.

The initial target for this round was a $340 billion valuation, but a source later told CNBC the final figure would likely be closer to $300 billion.

“SoftBank is close to finalizing a $40 billion primary investment in OpenAI at a $260 billion pre-money valuation,” CNBC’ reported Friday, citing sources.

CNBC’s sources indicate that some of the money will go toward OpenAI’s involvement in Stargate, a joint project between SoftBank, OpenAI, and Oracle. This venture, announced in January by US President Trump, aims to invest billions in U.S. AI infrastructure. As you may recall, SoftBank pledged to invest $15 billion in Stargate. The initiative brought Son back into the spotlight.

OpenAI’s ChatGPT chatbot, launched in late 2022, ignited the generative AI boom. Since then, the company has been a major player in this competitive field, alongside companies like Elon Musk’s xAI, Microsoft, Google, Amazon, Meta, and Anthropic. Experts predict the generative AI market could reach over $1 trillion in revenue within the next ten years.

This new funding follows SoftBank’s February commitment to spend $3 billion annually on OpenAI’s technology for its own use and its subsidiaries, which include Arm. SoftBank and OpenAI also launched “SB OpenAI Japan,” a joint venture to market OpenAI’s enterprise technology in Japan.

In January, OpenAI launched ChatGPT Gov, an AI platform specifically for the U.S. government. They’ve positioned it as more secure than ChatGPT Enterprise, allowing government agencies to input sensitive data within their own secure environments.

OpenAI’s latest funding development comes after Chinese competitor DeepSeek’s app shot to the top of Apple’s App Store. DeepSeek’s breakthrough R1 model made waves with reports that its powerful model was developed at a much lower cost than similar models from U.S. companies.

OpenAI CEO Sam Altman has called DeepSeek’s R1 “impressive” and stated on X (formerly Twitter) that OpenAI will deliver even better models, adding that it’s “invigorating to have a new competitor.” The success of DeepSeek already has investors questioning whether pouring billions into AI is a smart bet, as its model appears to match what leading U.S. firms have developed.