Masayoshi Son-led SoftBank Group is in talks to lead a funding round of up to $40 billion in ChatGPT maker OpenAI at a valuation of $300 billion, according to a Reuters report. News of the funding comes as a new Chinese AI startup, DeepSeek, has overtaken ChatGPT as the top free app on US app stores, shattering notions of American supremacy in the global AI race.
Despite DeepSeek's low-cost AI models hogging the limelight, SoftBank has valued OpenAI at $260 billion going into the funding round, up from its $150 billion valuation just a few months ago.
The funding will reportedly be in the form of convertible notes, similar to OpenAI's last funding round, and would be conditional on the ChatGPT maker restructuring its business to remove control of its non-profit arm. Of the $40 billion investment, $15 billion to $25 billion could be used to fund OpenAI's commitment to Stargate, a joint venture between OpenAI, SoftBank and Oracle that plans to invest up to $500 billion to help the US stay ahead of China and other rivals in the AI race.
An earlier report in the Wall Street Journal said that OpenAI and SoftBan were in talks for a $40 billion round at a valuation of $340 billion.
Notably, there has been increased scrutiny of spending by US AI companies after DeepSeek claimed in a paper last month that it spent just $5.6 million on an older Nvidia H800 processor to train its V3 language model.
By comparison, companies such as Microsoft and Meta have announced spending of $80 billion and $65 billion on building AI infrastructure this year alone. During an earnings call earlier this week, Microsoft's Satya Nadella and Meta's Mark Zuckerberg defended their companies' massive AI spending, saying it was crucial to staying competitive in the AI arena.
(With inputs from Reuters)
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