OpenAI Hits $300B Valuation After $40B Funding Round with SoftBank

OpenAI, the company behind ChatGPT, has raised an impressive $40 billion in its latest funding round, with SoftBank leading the investment. This amount is one of the largest ever secured by a private startup.

The funding pushes OpenAI’s valuation to $300 billion, nearly doubling its worth from the previous $157 billion valuation in October. This puts the company in the ranks of some of the most valuable private firms globally, competing with giants like SpaceX and ByteDance (the parent company of TikTok).

Of the $40 billion raised, SoftBank plans to invest $30 billion, while other investors including Microsoft, Coatue, Altimeter, and Thrive will contribute the remaining amount. However, SoftBank’s investment could drop to $20 billion if OpenAI doesn’t restructure its operations as planned by the end of this year.

Money to Fuel AI Research and Push for AGI

OpenAI has stated that the funds will be used to continue pushing the boundaries of AI research, with a focus on advancing toward Artificial General Intelligence (AGI) that can benefit humanity. The goal is to make significant strides in AI development, ensuring it’s used for good.

New Cheaper AI Model to Compete with Rivals

In another announcement, OpenAI revealed plans to release a more affordable and accessible AI model in the near future. CEO Sam Altman explained that although this idea had been in the works for some time, other priorities had delayed its launch. However, with rising competition from China’s DeepSeek and Meta’s Llama, OpenAI feels now is the right time.

This new model will be open-weight, allowing developers to customize it for their own use. It will differ from the current subscription-based model of ChatGPT, making it easier for developers to use and build on.

A Step Toward Open-Source AI

Although the new model won’t be fully open-source, it is a step closer to making AI more open and accessible. Some critics, however, are concerned that such open-weight models could be misused. Elon Musk, who was once an investor in OpenAI, has repeatedly urged the company to return to its open-source roots. Musk believes OpenAI should focus on safety and transparency in its approach to AI development.

Even with these concerns, OpenAI’s decision to release a more flexible AI model is seen as an effort to stay ahead of the competition. As AI technology continues to evolve, OpenAI remains at the forefront, using its new funding to pave the way for future innovations in the field.

Also Read: OpenAI Surpasses 400 Million Weekly Users in February 2025