SoftBank approves an additional investment of $22.5 billion in OpenAI, paving the way for its IPO.

Photo: SoftBank CEO Masayoshi Son (left) and OpenAI CEO Sam Altman

On October 26th, it was reported that the board of directors of SoftBank Group has approved an additional investment of $22.5 billion in OpenAI, which is the second tranche of its total investment plan. This move marks that SoftBank will complete a phased investment of up to $30 billion in this leading AI company.

It is reported that the final implementation of this investment is conditional on OpenAI completing a specific corporate restructuring. This restructuring will transform OpenAI into a public - benefit company, clearing the way for its eventual public listing. SoftBank's decision indicates its optimistic attitude towards OpenAI's successful completion of the restructuring.

According to the investment terms disclosed in April this year, if OpenAI fails to complete the restructuring by the end of this year or early next year, SoftBank has the right to reduce the investment scale. Notably, the valuation of OpenAI in this round of financing has reached $260 billion (excluding the amount of this round of financing).

It is reported that this round of financing, led by SoftBank, totals $41 billion, of which SoftBank's investment amounts to $30 billion. Previously, SoftBank had invested $7.5 billion in OpenAI in the first round of funding. Other investment institutions, including Dragoneer Investment Management and Thrive Capital, jointly contributed $11 billion. Now, SoftBank's remaining investment of $22.5 billion has also been approved.

This huge amount of funds will be mainly used to cover OpenAI's continuously rising R & D and operating costs for AI models. According to the company's forecast, its computing expenditure will reach $16 billion this year and soar to $40 billion next year. To support long - term technological breakthroughs, OpenAI has also reserved a special computing budget of up to $100 billion until 2030.

Financial data shows that OpenAI had $7.6 billion in cash on its books at the end of last year. The company told investors that it expects its operating expenses to exceed $8 billion this year and reach approximately $17 billion next year. Despite facing huge expenditures, OpenAI is still highly sought after in the capital market. Recent employee stock transfer transactions show that the company's valuation has climbed to $500 billion.

Analysts pointed out that OpenAI's IPO may still take several years. This is mainly due to its unique corporate structure: the non - profit organization model adopted when it was founded in 2015 means that early investors and employees hold profit - sharing rights rather than traditional equity.

If the restructuring is successfully completed, these rights will be converted into standard shares of the public - benefit company, covering all participants in the $6.6 billion financing round last year and the $41 billion financing round this year. However, before that, OpenAI still needs to complete two key steps: reaching a new agreement with its major investor and business partner, Microsoft, and obtaining approval from relevant regulatory authorities.

Among them, Microsoft and OpenAI are finalizing the specific terms of the revenue - sharing agreement. According to the existing arrangement, Microsoft can obtain 20% of OpenAI's total revenue and has the right to resell OpenAI's technology to its customers before 2030. The two parties signed a memorandum of understanding on deepening cooperation last month.

Meanwhile, this restructuring plan needs to be approved by the attorneys general of Delaware and California. Some non - profit organizations concerned about AI ethics are worried that this restructuring may weaken OpenAI's original intention of "developing AGI for the benefit of all mankind" and are actively lobbying regulatory authorities to ensure that the original non - profit organization maintains control in the new entity.

Earlier this year, OpenAI had made commitments regarding some concerns: the non - profit organization will continue to maintain control of the for - profit entity and obtain equity worth no less than $100 billion, accounting for approximately one - third of the total equity of the restructured company.

In addition, OpenAI is dealing with a lawsuit filed by co - founder Elon Musk. The CEO of Tesla, who invested tens of millions of dollars in OpenAI in its early days, is now trying to block this restructuring, accusing the company of deviating from its original founding purpose. OpenAI has asked the court to dismiss the relevant charges and filed a counter - lawsuit.

This article is from "Tencent Technology", compiled by Jin Lu, and published by 36Kr with authorization.