Investments in OpenAI will allow the companies to expand their collaboration
Japan’s SoftBank is increasing its investment in OpenAI. According to CNBC, the holding company will invest USD 40 billion in the AI startup, up from USD 25 billion previously. The funding will come in tranches over about two years, with the first tranche expected in the coming months.
OpenAI had previously announced its intention to launch a funding round to raise USD 40 billion. The company was aiming for a valuation of USD 340 billion. However, representatives of the company’s main investor, SoftBank, decided to change their strategy.
As a result of the new round of funding, Softbank will become the main investor in the AI company. Previously, Microsoft was the largest investor. The OpenAI management announced the following plans:
1. Establishing the SB OpenAI project with Japanese companies to develop AI services for corporations in Japan.
2. OpenAI will provide services to companies that are part of the holding structure. Arm Corporation will also participate.
3. The AI company’s services will be worth USD 3 billion a year.
4. OpenAI will continue its collaboration with Microsoft, using Azure cloud services for its AI models.
According to recent reports, the ChatGPT developer is valued at USD 260 billion. After SoftBank’s investment, this figure should reach USD 300 billion. By comparison, the company’s market capitalisation in autumn 2024 was USD 157 billion. SoftBank’s investment in OpenAI will significantly increase the company’s valuation. Overall, it reflects the growing interest in artificial intelligence and its potential. In addition, the collaboration will strengthen OpenAI’s position as one of the leaders in AI.
Part of the proceeds will go to the Stargate project, a joint venture between Softbank and Oracle. The project aims to expand the AI infrastructure in the United States. According to preliminary information, the investment in Stargate should amount to USD 19 billion. The total cost of the project is estimated at USD 500 billion.
New AI chips from OpenAI
The development of the company’s AI chips has reached the final stage. Reuters reports that OpenAI’s chips will focus on solving labour-intensive AI tasks. Analysts believe that this development will help reduce the AI industry’s dependence on NVIDIA products. Its share of the global chip market is more than 80%.
OpenAI announced plans to develop its chips in autumn 2023. There has since been news that the project will be in partnership with Broadcom. TSMC will manufacture the chips using 3nm technology. Mass production is due in 2026.
Richard Ho, who recently joined OpenAI from Google, will lead chip development. The approximate cost of developing a chip is around USD 500 million, but considering the necessary software and additional components, the total amount could double.
