OpenAI Pursues Further Investment for Its $40 Billion Financing Endeavor

Sources with insider knowledge have shared with WIRED that OpenAI is seeking to attract additional funding from both current and new investors. This initiative is a continuation of the $40 billion funding round first revealed in March. According to a source with direct insight, the opportunity to participate will reopen on Monday, July 28.

The $40 billion financing has elevated OpenAI's market value to a massive $300 billion, positioning it among the top privately-owned startups globally. This fundraising endeavor is spearheaded by SoftBank, a Japanese investment powerhouse, which is committed to contributing an impressive 75% of the entire capital. Initially, $10 billion was secured, with SoftBank providing $7.5 billion and the rest coming from a pool of other investors. OpenAI is now in the process of securing the remaining $30 billion, with $22.5 billion expected from SoftBank and $7.5 billion from additional investor groups.

The solid promise from SoftBank to inject $10 billion could be contingent upon OpenAI undergoing a structural reconfiguration by year-end, as confirmed by WIRED.

At this time, OpenAI has chosen not to provide any public statements regarding these developments.

According to data from PitchBook, OpenAI has amassed a total of $63.92 billion in funding since its establishment in 2015. Its financial supporters are a mix of institutional and individual investors, including big names like Microsoft, Andreessen Horowitz, Sequoia Capital, Founders Fund, Thrive Capital, Coatue Management, Nvidia, and Reid Hoffman. Microsoft's connection with OpenAI is particularly strong, with Microsoft not only supplying extensive cloud computing capabilities but also benefiting from exclusive access to OpenAI's leading models. Recent reports, however, suggest some friction in this relationship.

OpenAI is also collaborating with SoftBank and others on an extensive AI data center project, which is anticipated to require investment upwards of $500 billion. The Wall Street Journal reported tension between the two over various project dynamics, including site selections for the data centers. It’s also noted that OpenAI’s CEO, Sam Altman, has been actively pursuing agreements for data centers aligned with Stargate without involving the Japanese firm.

SoftBank has similarly chosen to withhold from commenting publicly on these issues.

The internal structure of OpenAI has been another source of debate, especially with Elon Musk, who was a founding figure in the organization committed to protecting humanity from the potential risks of artificial general intelligence (AGI). Musk's departure from OpenAI’s board in early 2018 coincided with the company’s creation of a for-profit branch to facilitate more effective fundraising. Criticism arose last year, accusing the company of drifting from its original goals and focusing on refining AGI for monetary gain, favoring Microsoft’s interests rather than societal benefits.

In a move to address these controversies, OpenAI proposed a restructured framework in May, which would maintain nonprofit oversight of the company while converting its current for-profit division into a public benefit corporation (PBC). This new entity would be responsible to shareholders but also engaged in initiatives with tangible public advantages. SoftBank’s investment hinges on the acceptance of this structure by legal authorities in California and Delaware by the beginning of next year.