Investors Double Down as OpenAI Nears Record $40 Billion Funding Round

OpenAI is on track to secure a staggering $40 billion in funding, marking the largest-ever private investment round, according to Bloomberg. The deal, led by SoftBank, is set to push OpenAI’s valuation to an eye-watering $300 billion—nearly double its previous worth of $157 billion from October’s $6.6 billion funding round.

SoftBank will reportedly contribute $7.5 billion in the first phase of funding, with an additional $2.5 billion from a syndicate of investors, including Magnetar Capital, Coatue Management, Peter Thiel’s Founders Fund, and Altimeter Capital Management. The second phase, expected to close later this year, will see SoftBank inject another $22.5 billion, with the syndicate adding $7.5 billion.

Confidence in OpenAI’s AI Dominance

Since launching DALL-E 2 and ChatGPT in 2022, OpenAI has set the pace in generative AI. Backed by Microsoft, the company continues to roll out increasingly powerful models, integrating them seamlessly into Microsoft’s ecosystem.

Earlier this year, OpenAI and SoftBank explored a half-trillion-dollar AI infrastructure investment in the U.S., a plan endorsed by Donald Trump. However, concerns arose after China’s DeepSeek unveiled a competitive AI model developed at a fraction of OpenAI’s cost. The revelation cast doubt on OpenAI’s capital-heavy approach, raising questions about whether its massive spending on AI model training remains sustainable.

Despite this, the latest funding round signals investor confidence in CEO Sam Altman’s strategy. While DeepSeek’s low-cost model challenges OpenAI’s dominance, the unprecedented investment suggests backers believe OpenAI can maintain its edge.

Financial Struggles and Future Projections

Despite its soaring valuation, OpenAI isn’t expecting positive cash flow until 2029. The company faces mounting expenses in AI research, computing power, and top-tier talent. However, projections indicate that revenue could exceed $125 billion by 2029.

For 2025, OpenAI anticipates more than tripling its revenue to $12.7 billion, up from a forecasted $3.7 billion in 2024. These figures align with previous estimates reported by Reuters, which suggested revenue would surpass $11.6 billion by 2025.