SoftBank will invest US$500 million in OpenAI – 09/30/2024 – Market

Masayoshi Son’s SoftBank will invest US$500 million (R$2.7 billion) in OpenAI as part of a fundraising round that should close this week and could value the AI ​​(artificial intelligence) startup at US$150 billion (R$817 billion).

SoftBank will invest through its second Vision Fund, a large vehicle to support startups that is now made up largely of Son’s personal wealth, according to two people with knowledge of the deal.

SoftBank will join existing investors, including venture capital fund Thrive Capital and Microsoft, in a US$6.5 billion (R$35.4 billion) financing round, which is expected to close in the coming days, from according to people familiar with the discussions.

The Japanese group was one of the most prolific startup investors in the years leading up to 2022, a period in which the valuation of young technology companies soared, in many cases to unsustainable levels.

SoftBank’s approximately US$14 billion (R$76.3 billion) investment in WeWork and Son’s close relationship with its founder, Adam Neumann, became emblematic of the excesses of that period, after the coworking company collapsed in a maximum valuation of US$47 billion (R$256.1 billion) in 2019.

After a period of downturn, SoftBank stepped up its investments in AI, with Son declaring it was time to “go on the counterattack” to take advantage of the new technology.

SoftBank is the majority owner of British chip designer Arm, and Son has spoken about his ambition to use it as a centerpiece in a network of companies advancing AI.

OpenAI is finalizing the details of one of the largest private funding rounds ever undertaken amid a chaotic scenario. The company’s chief technology officer, Mira Murati, unexpectedly left the company last week, along with Bob McGrew, director of research, and Barret Zoph, vice president of research.

They are the latest departures in a series of top-level casualties this year that have ousted most of OpenAI’s founding team and most prominent security researchers.

The company is also exploring a corporate restructuring that would eliminate its current arrangement in which investors have a stake in a for-profit subsidiary of the company governed by a nonprofit board, according to people with knowledge of the discussions.

OpenAI CEO Sam Altman has for the first time discussed the possibility of acquiring a direct equity stake in the company as part of these plans, they added.

But many investors seem undeterred and are still willing to commit to the company that continually pushes the frontier of AI technology. They are betting that OpenAI can overcome competition from big tech rivals including Google and Meta, as well as startups like Anthropic and Mistral.

SoftBank’s participation in the round was first reported by The Information. SoftBank and OpenAI declined to comment.