OpenAI has closed a record-breaking $40 billion private funding round, marking the largest capital raise by a private firm so far. The investment, primarily led by Japan’s SoftBank, values the AI company at $300 billion. This places OpenAI among the most valuable privately held tech companies in the world, alongside TikTok’s parent company (ByteDance) and second only to Elon Musk’s SpaceX, which currently holds a valuation of $350 billion.
“Today we’re announcing new funding—$40 billion at a $300 billion post-money valuation, which enables us to push the frontiers of AI research even further, scale our compute infrastructure, and deliver increasingly powerful tools for the 500 million people who use ChatGPT every week,” OpenAI announced in an official statement. “We’re excited to be working in partnership with SoftBank Group—few companies understand how to scale transformative technology like they do. Their support will help us continue building AI systems that drive scientific discovery, enable personalized education, enhance human creativity, and pave the way toward AGI that benefits all of humanity.”
The proceeds from the funding round are expected to be channeled towards the firm’s computing power and infrastructure. Approximately $18 billion will be allocated to the company’s Stargate initiative, a joint venture aimed at building AI data centers and leverage the ongoing growth of the AI (and generative AI) markets. The Stargate project, which was announced in January and involves partnerships with SoftBank, Oracle, and other key players, is expected to require an overall investment of $500 billion over several years to create the network of data centers. The AI firm also reported that ChatGPT now has 500 million weekly users, a sharp increase from 400 million just one month ago. CEO Sam Altman has described the growth as unprecedented, noting that the platform had initially gained one million users within its first five days of launch (back in 2022).
SoftBank contributed the bulk of the financing (nearly 75%) – providing $30 billion to the latest infusion of capital (an initial investment of $7.5 billion, followed by the remaining $22.5 billion later on). Other participants include OpenAI’s longtime partner, Microsoft, along with Coatue, Altimeter, and Thrive Capital. According to reports, the structure of the funding round requires OpenAI to meet specific conditions in order to receive the full investment. Initially, OpenAI is set to receive $10 billion, with the remaining $30 billion expected to be disbursed by the end of 2025. However, SoftBank has stipulated that its total investment could be reduced to $20 billion if OpenAI does not transition into a for-profit entity by December 31.
Currently, OpenAI operates as a capped-profit limited partnership, a model that was introduced in 2019. The organization was initially founded as a non-profit in 2015. If OpenAI proceeds with restructuring into a full-profit company, the original nonprofit would be spun off as an independent entity. However, such a move would require approval from Microsoft and the California Attorney General, and it is likely to face further legal challenges, including opposition from OpenAI co-founder Elon Musk, who has been critical of the company’s direction in recent years.
