Softbank intends to invest up to $1.5 billion in OpenAI shares via a tender offer aimed at current and former employees, signalling another major twist in the race for AI supremacy.
Initially reported by CNBC, the tender offer prices employee stock based on OpenAI’s most recent funding round, which took place last month. The $6.6 billion raise valued the company at $150 billion.
Workers have until December 24 to decide whether to accept the offer, which allows former and current OpenAI employees to sell their shares at $210 each. The deal is set to close early next year.
The investment emerges via SoftBank’s Vision Fund 2, which centres on AI investments and high-potential tech prospects. SoftBank CEO Masayoshi Son seeks to position the Japanese organisation as an AI leader, as illustrated by SoftBank’s early investment in the semiconductor company Arm. At a conference in October, Son revealed that he’s saving “tens of billions of dollars” for the “next big move” in AI. SoftBank’s Vision Fund 2 also recently invested in several AI startups, including Poolside, Glean, and Perplexity.
Son has been especially keen on OpenAI. This $1.5 billion investment follows a Softbank $500 million buy-in last month during the aforementioned funding round. Son has openly praised OpenAI CEO Sam Altman and mentioned that he frequently communicates with him. According to CNBC sources, the tech investor has been pursuing a more significant stake in the company for some time.
SoftBank’s additional investment positions it as one of OpenAI’s most prominent backers. It joins Microsoft and Josh Kushner’s Thrive Capital, which have invested $13 billion and over $1 billion, respectively. Other significant investors include Tiger Global, Altimeter Capital, Coatue Management, and the Abu Dhabi-based tech investment firm MGX.
This move underscores SoftBank’s commitment to expanding its influence in the AI sector and supports OpenAI’s growth and innovation efforts. This funding aims to help OpenAI propel its AI capabilities and maintain its edge in the increasingly competitive AI market. However, the tender offer is unrelated to OpenAI’s potential plans to restructure the research organisation into a for-profit entity.
The Gen AI market is projected to reach $1 trillion within the next decade, signalling that the AI race is intensifying. This staggering growth potential presents significant long-term potential for the Softbank/OpenAI partnership.
Softbank and OpenAI declined to comment to CNBC.
What Else Has OpenAI Been Up To Recently?
Earlier this month, OpenAI launched ChatGPT Search, an AI-powered search engine set to compete seriously with Google and Microsoft Bing.
ChatGPT Search is a new feature within its popular generative AI assistant. It provides users with real-time updates on sports scores, stock quotes, news, weather, and more. By leveraging real-time web search, ChatGPT collaborates with various news and data providers to deliver up-to-the-minute information.
ChatGPT can automatically initiate a web search based on your query, or users can manually start a search by clicking the web search icon.
Meanwhile, OpenAI launched its Realtime API in public beta in October. This API will allow developers to build voice assistants that communicate more naturally with users.
OpenAI’s new Realtime API introduces low-latency, multimodal, and speech-to-speech capabilities, which it compares to ChatGPT’s Advanced Voice Mode. The API enables more dynamic and responsive interactions. Additionally, OpenAI announced via its online newsroom that it is adding audio input and output to the Chat Completions API. This update caters to use cases where rapid system responses are not required, further enhancing the platform’s versatility.
