OpenAI Closes $40 Billion Funding Round, Largest Private Tech Deal on Record
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Reports OpenAI's record $40B funding round, signaling massive capital flows into frontier AI development and raising governance questions about OpenAI's nonprofit-to-for-profit restructuring, which has direct implications for AI safety oversight and accountability.
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Summary
OpenAI closed a $40 billion funding round led by SoftBank ($30B) with additional investors including Microsoft, valuing the company at $300 billion. The capital will fund AI research and compute infrastructure, including the Stargate joint venture. SoftBank's investment could be reduced to $20B if OpenAI fails to complete its for-profit restructuring by end of 2025.
Key Points
- •OpenAI raised $40B at a $300B valuation — nearly 3x the previous record for a private tech funding round (Ant Group's $14B in 2018).
- •SoftBank leads with $30B; ~$18B is earmarked for the Stargate AI infrastructure joint venture with SoftBank and Oracle.
- •SoftBank's investment could drop to $20B if OpenAI doesn't restructure into a for-profit entity by Dec. 31, 2025.
- •ChatGPT now has 500 million weekly users (up from 400M the prior month); OpenAI projects revenue to triple to $12.7B in 2025.
- •The for-profit conversion requires approval from Microsoft, California AG, and faces legal challenge from Elon Musk.
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OpenAI closes $40 billion funding round, record for private tech deal Skip Navigation Markets Business Investing Tech Politics Video Watchlist Investing Club PRO Livestream Menu
Key Points OpenAI on Monday announced it had closed its $40 billion funding round, the most ever raised by a private tech company.
The deal values OpenAI at $300 billion, including the new capital.
The round comes to $30 billion from SoftBank and $10 billion from a syndicate of investors.
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Follow your favorite stocks CREATE FREE ACCOUNT watch now VIDEO 2:04 02:04 OpenAI closes $40 billion funding round, largest private tech deal on record Squawk Box OpenAI on Monday announced it had closed what amounts to the largest private tech funding round on record.
The $40 billion financing values the ChatGPT maker at $300 billion, including the fresh capital. It's nearly three times the largest amount previously raised by a private tech company, according to PitchBook.
The valuation puts OpenAI behind only SpaceX at $350 billion and even with TikTok parent ByteDance among the world's most richly valued private companies, according to CB Insights .
Japan's SoftBank is leading the round with $30 billion, and is joined by a syndicate of other backers, including core investor Microsoft as well as Coatue, Altimeter and Thrive.
OpenAI said it plans use the fresh capital to "push the frontiers of AI research even further" and scale its compute infrastructure, according to a blog post. About $18 billion of the funding is expected to be used for OpenAI's commitment to Stargate , according to a person familiar with the matter who spoke anonymously due to the confidential nature of the terms of the deal.
The joint venture between SoftBank, OpenAI and Oracle was announced by President Donald Trump in January.
The initial funding will be $10 billion, followed by the remaining $30 billion by the end of 2025, the person said. But the round comes with a caveat. SoftBank said in an updated disclosure on Monday that its total investment could be slashed to as low as $20 billion if OpenAI doesn't restructure into a for-profit entity by Dec. 31.
The provision ramps up pressure on OpenAI to pull off the for-profit conversion, a plan that will need the blessing of Microsoft and the California attorney general, and has been challenged in court by Elon Musk , who was one of the co-founders of OpenAI in 2015, when it was started as a nonprofit research lab.
The company's current and unusual hybrid structure includes a capped-profit limited partnership created in 2019. The original nonprofit is the controlling shareholder and would be spun out as an independent entity if the company can restructure. OpenAI's venture backers have received convertible notes that would turn into equity.
watch now VIDEO 2:34 02:34 OpenAI expects revenue to triple to $12.7 billion this year Power Lunch The largest private deal before OpenAI&#
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