Sam Altman’s OpenAI has raised $40 billion in a new funding round led by investment giant SoftBank as it looks to stave off rivals like Elon Musk’s xAI and China-based DeepSeek.
The ChatGPT maker secured a $300 billion post-money valuation with the round, OpenAI said in an announcement on Monday.
After the round, OpenAI is tied with TikTok parent ByteDance as the second-most valuable privately-held company, trailing only Musk-led SpaceX.
OpenAI said the money “enables us to push the frontiers of AI research even further, scale our compute infrastructure, and deliver increasingly powerful tools for the 500 million people who use ChatGPT every week.”
The AI giant will receive $10 billion in initial funding – with SoftBank and its CEO Masayoshi Son to contribute $7.5 billion and the rest of the money coming from a group of investors that includes Microsoft, Thrive Capital, Altimeter Capital and Coatue Management, Bloomberg reported.
The additional $30 billion is set to be dispersed at the end of the year, with $22.5 billion coming from SoftBank and $7.5 billion from other investors.
The funding round is the largest of its kind on record, according to PitchBook data.
However, the full funding is contingent on OpenAI successfully completing its plans to transform into a for-profit entity.
If the restructuring succeeds, SoftBank’s total investment will reach $30 billion, with co-investors forking over the remaining $10 billion.
If it fails, the Japanese investment firm will reduce its commitment to $20 billion, according to a disclosure by SoftBank.
Musk, who co-founded OpenAI in 2015 but left the firm after a falling-out with Altman, is currently challenging the restructuring plans in court. Last month, a federal judge declined to grant Musk’s request for an injunction blocking OpenAI’s for-profit claims, but said the case could proceed to an expedited trial.
The new funds will be used in part to cover OpenAI’s portion of the “Stargate” project – a collaborative effort with SoftBank and Larry Ellison’s Oracle to build a massive network of data centers and other infrastructure to support the firms’ AI ambitions.
Stargate was unveiled in January at a White House event by President Trump, who called it a “a resounding declaration of confidence in America’s potential.”
OpenAI said the financing was another step toward achieving artificial general intelligence (AGI) – defined as AI with human-level or better cognitive capabilities.
In its statement, SoftBank said “massive computing power is essential” for realizing OpenAI’s plans.
The round closed even after DeepSeek raised questions about the need for massive investments in AI infrastructure earlier this year by unveiling an advanced model that it claimed to have trained for less than $6 million.
With Post wires
