OpenAI Nears Completion of $40 Billion SoftBank-Led Funding Round

OpenAI CEO Sam Altman (Image Source: every)

TMTPOST -- OpenAI is close to completing a $40 billion funding round led by SoftBank Group Corp., with participation from investors such as Magnetar Capital, Coatue Management, Founders Fund, and Altimeter Capital Management, according to sources familiar with the matter.

Magnetar Capital, a hedge fund based in Evanston, Illinois, could contribute up to $1 billion, according to multiple sources, requesting anonymity due to the private nature of the discussions.

If finalized, this would be the largest funding round in history, according to data from research firm PitchBook. The deal is expected to value OpenAI at $300 billion, nearly doubling its previous valuation of $157 billion from its October fundraising round.

As part of the agreement, SoftBank will initially invest $7.5 billion, with an additional $2.5 billion coming from a group of investors. A second tranche of $30 billion is expected later in the year, comprising $22.5 billion from SoftBank and $7.5 billion from the investor syndicate, a source said.

Following the announcement, SoftBank’s stock dropped as much as 4.7% in Tokyo, and its credit default swaps widened amid concerns over the financial impact of such a significant investment.

In a separate move, SoftBank has committed billions of dollars to the Stargate Project, a joint venture in Abilene, Texas, involving OpenAI, Oracle Corp., and MGX.

The funding round highlights investor confidence in OpenAI’s rapid growth, driven by the increasing global adoption of AI technologies.

OpenAI anticipates tripling its revenue this year to $12.7 billion, propelled by demand for its AI-powered software, according to Bloomberg News. The company generated $3.7 billion in revenue last year and expects to more than double that figure next year to $29.4 billion, according to an insider.

Despite its impressive growth, OpenAI faces significant expenses related to chips, data centers, and top-tier AI talent. It does not anticipate becoming cash-flow positive until 2029, a year in which it projects revenue will surpass $125 billion, the source added.

OpenAI made an update to AgentSDK on Thursday, supporting open-source MCP services, which can unlock unlimited tools through a unified interface standard. Now, the Agent can quickly integrate various tools such as web search, professional analysis, local queries, and web tracking, which aids in developing highly complex automated intelligent agents.