OpenAI seeks $40 billion in fresh funding as DeepSeek disrupts AI market

The development follows concerns sparked by Chinese AI startup DeepSeek, which recently introduced a highly advanced chatbot at a significantly lower cost than its American rivals, unsettling the mark

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OpenAI, the developer behind popular AI tool ChatGPT, is aiming to secure $40 billion in fresh funding, which would place its valuation at an extraordinary $340 billion, according to a report in The Wall Street Journal.  

 

Japan’s SoftBank is said to be leading the funding initiative, with discussions ongoing to invest between $15 billion and $25 billion. If finalised, this would make SoftBank the largest financial supporter of OpenAI.

 

The development follows concerns sparked by Chinese startup DeepSeek, which recently introduced a highly advanced chatbot at a significantly lower cost than its American rivals, unsettling the market.  

 

The investment plan was initially reported by The Financial Times and comes only three months after OpenAI’s last funding round, which valued the company at $157 billion. If successful, doubling its valuation in such a short time would be an unprecedented event in Silicon Valley, highlighting the substantial financial resources required to develop cutting-edge AI models and infrastructure.   

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SoftBank and OpenAI are both involved in the Stargate initiative, announced by US President Donald Trump, which aims to invest up to $500 billion in artificial intelligence infrastructure in the United States. A portion of the new funds is expected to support OpenAI’s commitment of approximately $18 billion to this project, The Wall Street Journal reported.  

 

SoftBank investment could exceed $40 billion

 

The proposed SoftBank investment would add to its existing pledge of more than $15 billion to Stargate, according to The Financial Times, citing sources familiar with the negotiations. The report further suggested that SoftBank's total financial involvement with OpenAI could eventually exceed $40 billion.  

 

Following the report, SoftBank shares rose by 3 per cent during Thursday’s trading in Tokyo. Founded by Japanese entrepreneur Masayoshi Son, the company has a history of major investments, including successful early stakes in Yahoo and Alibaba in the 1990s. However, some of its more recent ventures have been less profitable. Son, an early supporter of Trump, has been increasingly shifting SoftBank’s focus towards AI, leveraging its ownership of chip designer Arm.  

 

Meanwhile, Tesla CEO Elon Musk has been openly critical of the Stargate initiative, claiming on X earlier this month that its primary investors "don't actually have the money."

 

Musk, an early backer of OpenAI, has been embroiled in a long-running dispute with its founder, Sam Altman, who dismissed Musk’s remarks as "wrong."