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Softbank To Invest $40 Billion In OpenAI At $260 Billion Valuation

SoftBankhttps://techbullion.com/softbank-group-formed-a-joint-venture-with-tempus/ is close to finalizing a $40 billion primary investment in OpenAI, which is valued at $260 billion before money.

TakeAway Points:

  • SoftBank is nearing completion of a $40 billion initial investment in OpenAI at a pre-money valuation of $260 billion, according to sources.
  • Over the course of the following 12 to 24 months, SoftBank would disburse the funds, with the first installment arriving as early as April.
  • OpenAI’s commitment to Stargate, the SoftBank, OpenAI, and Oracle joint venture that President Donald Trump announced, is anticipated to get a portion of the cash.

SoftBank’s $40 billion investment in OpenAI

SoftBank would pay out the funding, which would mean a $300 billion post-money valuation for OpenAI, over the next 12 to 24 months, with the first payment coming as soon as spring, Faber reported Friday. SoftBank would be able to syndicate as much as $10 billion of the amount.

The new funding would mean SoftBank surpasses Microsoft as the artificial intelligence startup’s top backer. OpenAI was last valued at $157 billion by private investors in October.

The round was initially expected to award OpenAI a valuation of $340 billion, but a source familiar with the matter later told CNBC that the amount would be closer to $300 billion.

Part of the funding is expected to be used for OpenAI’s commitment to Stargate, sources told CNBC. Stargate is a joint venture between SoftBank, OpenAI and Oracle that was announced by President Donald Trump in January. The plan calls for billions of dollars to be invested in U.S. AI infrastructure.

OpenAI launched its ChatGPT chatbot in late 2022, kicking off the generative AI race. Since then, the company has aggressively competed against the likes of Elon Musk’s xAI, as well as Microsoft, Google, Amazon, Meta and Anthropic. The generative AI market is predicted to top $1 trillion in revenue within a decade.

Previous commitment into OpenAI

The latest funding round comes after SoftBank on Monday committed to spending $3 billion per year on OpenAI’s tech for itself and its subsidiaries, including British chip designer Arm. SoftBank and OpenAI also announced a joint venture, billed as “SB OpenAI Japan,” which will market OpenAI’s enterprise tech to companies in Japan.

OpenAI in January released ChatGPT Gov, an AI platform built specifically for the U.S. government. The startup pitched the new platform as having more security than ChatGPT Enterprise. ChatGPT Gov will allow government agencies to feed “non-public, sensitive information” into OpenAI’s models while operating within their own secure hosting environments, the company said.

The government offering follows a series of moves by OpenAI and CEO Sam Altman that appeared to be aimed at appeasing Trump. Altman contributed $1 million to Trump’s inauguration, attended the event alongside other tech CEOs and has publicly signaled his admiration for the president. 

OpenAI’s new funding comes after Chinese rival DeepSeek saw its app soar to the top of Apple’s App Store rankings in January after its debut. DeepSeek’s breakthrough R1 model roiled U.S. markets on reports that the powerful model was trained at a fraction of the cost of U.S. competitors’ models.

Altman described DeepSeek’s R1 as “impressive,” and wrote on X that “we will obviously deliver much better models and also it’s legit invigorating to have a new competitor!”







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France Probes Elon Musk’s X Over Algorithm Manipulation

Prosecutors in France have launched an inquiry into Elon Musk’s X due to claims that the company bent its algorithms to control conversations on the social media site.

TakeAway Points:

  • French prosecutors have opened an investigation into X over allegations that it distorted its algorithms.
  • The Paris public prosecutor’s office said it received a report from a French lawmaker criticizing X over “biased algorithms” that were “likely to have distorted the operation of an automated data processing system.”
  • Tesla sold 63,238 units of its electric cars in January in China, down 11.5% from the 71.447 cars sold in the same month last year.

X faces criminal probe in France over algorithm manipulation concerns

French prosecutors have opened an investigation into Elon Muskhttps://techbullion.com/elon-musk-promotes-far-right-afg-candidate/

’s X over allegations that it distorted its algorithms to manipulate discourse taking place on the social media platform.

The Paris public prosecutor’s office said it received a report from a French lawmaker on Jan. 12 criticizing X over “biased algorithms” that were “likely to have distorted the operation of an automated data processing system.”

Magistrates and specialized assistants of the office’s cybercrime section have been tasked with analyzing the report and carrying out initial technical checks on the platform, the prosecutor’s office said on Friday in emailed comments.

X, which was formerly known as Twitter, has been dogged by concerns surrounding shortcomings on content moderation since Musk bought the platform in 2022 for $44 billion.

According to French radio station Franceinfo, the French lawmaker who sent the report to the prosecutor’s office was Eric Bothorel, an MP in President Emmanuel Macron’s own Ensemble Pour La Republique party.

Meanwhile, the European Union has been investigating X for potential violations of the Digital Services Act, a law that requires social media firms to tackle the spread of harmful content on their platforms.

Last month, the European Commission, which is the executive arm of the EU, asked X to hand over internal documents about its algorithms by Feb. 15 as part of its ongoing DSA investigation into the company.

X has been accused of manipulating its systems to give far-right posts and politicians greater visibility over other political groups.

Musk has made several public statements in Germany voicing support for the country’s far-right Alternative für Deutschland (AfD) party, even making a surprise virtual appearance at a campaign event last month.

The AfD was polling second ahead of Germany’s upcoming Feb. 23 general election.

Tesla car sales in China fall 11.5% 

Sales of Tesla’s cars to China fell in January as competition from domestic rivals continued to heat up.

Tesla sold 63,238 units of its electric cars in January, down 11.5% from the 71,447 cars sold in the same month last year.

Shares of Tesla were down about 1.5% in premarket trading.

Chinese rival BYD meanwhile sold 296,446 pure electric and plug-in hybrid vehicles last month, up 47% year-on-year.

Other Chinese rivals of Tesla, including Changan Automobile and Xpeng, also posted growth in sales.

Tesla has attempted to use price cuts as an incentive to retain Chinese’ buyers interest in its car. Late last year, Tesla slashed the price of its Model Y car and also extended a zero-interest five-year loan plan until the end of January.

Last month, the U.S. giant also announced a revamped version of the Model Y — one of its best-selling EV autos — in China. This also came with a 0% interest plan.

Tesla has not introduced a new model since it began delivering the Cybertruck in late 2023, which starts at nearly $80,000. Investors have been yearning for a new mass-market model from the company to reinvigorate sales.

Tesla has said a new affordable model could be launched in the first half of 2025.

Meanwhile, the automaker is pushing to launch its driver assist system, which it markets as “Full Self Driving,” in China this year, as rivals also roll out similar features.







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