OpenAI eyes $25 billion investment from SoftBank amid DeepSeek shock

SoftBank is in talks to invest up to $25 billion in OpenAI as part of a broader partnership that could see the Japanese conglomerate spend more than $40 billion on AI initiatives with the Microsoft-backed startup, according to the Financial Times.

The potential investment would make SoftBank OpenAI’s largest single backer, the report said, surpassing Microsoft, which first invested in the ChatGPT maker in 2019. The deal comes after both companies announced last week they would jointly invest $100 billion in Stargate, a U.S. data center project for OpenAI that could expand to $500 billion over four years.

SoftBank plans to invest $15 billion to $25 billion directly into OpenAI in addition to its $15 billion Stargate commitment, the report said. OpenAI will invest around $15 billion in Stargate, with SoftBank’s equity investment potentially covering OpenAI’s infrastructure commitment.

The talks come at a time when Chinese firm DeepSeek’s release of its R1 “reasoning” model, which was built on a relatively modest budget, rattled public markets this week.

The chip giant Nvidia lost as much as $589 billion in a day before making a slight recovery, as investors worried that big investments in expensive AI hardware might not be necessary if companies could achieve similar results with fewer resources.

OpenAI claimed earlier this week that it had found evidence that DeepSeek used OpenAI’s proprietary models to train R1 and other models through a technique called “distillation,” which allows developers to achieve similar performance with smaller models at a much lower cost. The company says this would violate its terms of service, which prohibit using outputs to develop competing models.

OpenAI’s deal with SoftBank, which Financial Times says hasn’t finalized, represents SoftBank founder Masayoshi Son’s biggest bet since injecting $16 billion into WeWork. It would also reduce OpenAI’s dependence on Microsoft for computing resources, with Microsoft recently agreeing to give up its position as OpenAI’s exclusive cloud provider.

Around 20% of Stargate’s funding is expected to be equity, with the remainder financed through debt secured against assets and cash flow, the report said. OpenAI, which reached a $157 billion valuation last year, is also negotiating to become a for-profit company to facilitate additional fundraising.