Japan’s SoftBank has finalized its 40 billion USD investment commitment in the artificial intelligence startup OpenAI.
According to CNBC on Tuesday, SoftBank transferred the final installment of 22-22.5 billion USD to OpenAI last week, fulfilling its 40 billion USD investment pledge.
Combined with its previous 8 billion USD direct investment and 10 billion USD joint investment, SoftBank has now secured over 10% stake in OpenAI.
SoftBank appears to have already reaped substantial valuation gains as OpenAI’s corporate value has skyrocketed.
This investment was based on OpenAI’s pre-investment valuation of 260 billion USD.
As an early investor before OpenAI’s value skyrocketed, SoftBank has already proceeded with investments last year when the company was valued between 80-100 billion USD. In just a year, OpenAI’s valuation has nearly tripled.
If OpenAI goes public next year as anticipated, its market cap is widely expected to exceed 500 billion USD, potentially leading to enormous valuation gains for SoftBank.
Above all, SoftBank is reaping the benefits of the AI boom through impeccable timing in its investment strategy.
While maintaining its confidence in Nvidia, SoftBank sold all 32.1 million Nvidia shares in October, cashing out approximately 5.83 billion USD.
SoftBank has perfectly timed this switch as AI infrastructure groundwork is expected to be completed next year, amid expectations that software and platform companies will start generating real profits from AI infrastructure, potentially driving stock prices higher.
Meanwhile, through its substantial equity investment, SoftBank has gained deep involvement in OpenAI’s core infrastructure projects like Stargate, securing additional revenue opportunities.
