SoftBank Finally Gets Its Piece of OpenAI

The internet didn’t hold back in mocking OpenAI and SoftBank in response to my scoop on SoftBank’s Vision Fund investing $500 million at a $150 billion pre-investment valuation in the ChatGPT developer. The commentators quickly interpreted the Japanese telecom giant’s participation in the financing as a sign that the artificial intelligence market is peaking.

It’s become clear that the investment firms keen to support OpenAI’s mega-financing are the same ones that wrote big checks at inflated valuations, earning the derision of traditional Silicon Valley firms. OpenAI’s latest backers include returning investor Tiger Global Management, SoftBank’s Vision Fund and a growing list of other crossover firms such as Coatue Management and Dragoneer Investment Group, which went on unprecedented deal sprees in 2021. 

On top of that, OpenAI has also courted a massive sovereign-backed fund from the Middle East. These funds still carry a reputation for passive investing and lacking strategic insight.