OpenAI raises $40B led by SoftBank at $300B valuation
OpenAI just closed a staggering $40 billion funding round led by SoftBank, pushing its valuation to $300 billion in the largest private tech raise in history. The company secures $10 billion upfront, with the remaining $30 billion contingent on converting into a fully for-profit company by year's end. Why it matters: Frontier AI development demands unprecedented capital, and this war chest keeps OpenAI's aggressive compute roadmap funded.
If you thought the AI funding craze was cooling down, OpenAI and Masayoshi Son just flipped the board.
OpenAI has secured a mammoth $40B funding round led by SoftBank, driving the company’s valuation to a staggering $300B. According to CNBC, this marks the single largest private tech funding round in history.
The strings attached to thirty billion
The cash won't hit the bank all at once. OpenAI gets an initial $10B upfront, with SoftBank cutting a $7.5B check and the rest coming from an investor syndicate. Other notable backers joining the party reportedly include Magnetar Capital, Coatue, and Founders Fund.
Here is the catch: the remaining $30B is scheduled to land by the end of the year, but CNBC reports it hinges entirely on OpenAI officially restructuring into a for-profit corporation. If that transformation stalls, OpenAI could forfeit a quarter of the entire deal.
The capital injection also supports OpenAI’s deep commitments to Stargate, the multi-hundred-billion-dollar datacenter joint venture announced alongside SoftBank, Oracle, and MGX.
Meanwhile, product momentum has been relentless. OpenAI confirmed ChatGPT now commands 500 million weekly active users. CEO Sam Altman noted the platform picked up 1 million users in a single hour earlier this week, driven by a viral ChatGPT Images feature mimicking Studio Ghibli artwork. Altman also dropped word that OpenAI plans to release a powerful open-weight reasoning model in the coming months.
Tripling revenue while burning billions
Make no mistake: running frontier AI remains an eye-watering burn. Bloomberg reports OpenAI projects revenue to surge to $12.7B this year, up sharply from $3.7B in 2024.
Yet the company reportedly burned through roughly $5B last year on infrastructure and training alone. Internal models do not foresee OpenAI reaching positive cash flow until 2029, when revenue is projected to hit a wild $125B.
Why it matters
For builders and enterprise users, this cash hoard signals that OpenAI will have the compute runway to keep pushing frontier models without throttling access. The teased open-weight reasoning model also suggests OpenAI is ready to fight back against open-source rivals directly on their own turf, giving developers powerful new local alternatives.
Across the industry, this effectively locks in the frontier AI race as an exclusive game for trillion-dollar incumbents and sovereign-scale balance sheets. Rivals like Anthropic and Google will be forced to match this cadence of datacenter CapEx just to stay within striking distance.
In our view, tethering $30B of the round to OpenAI's for-profit pivot is both a ruthless masterstroke by investors and an immense operational hazard. Altman gets the war chest he needs to chase AGI, but untangling OpenAI's non-profit governance before year's end is an unprecedented legal tightrope. If regulatory pushback or internal squabbling derails that transition, the company risks blowing a massive hole in its financing at the exact moment its infrastructure bills come due.
Sources (1)
- theverge.com(opens in a new tab)Originaltheverge.com