SoftBank’s board has approved the remaining $22.5 billion investment in OpenAI, bringing the Japanese tech giant closer to completing one of the largest private technology investments ever made. This approval, granted on Saturday, October 26, 2025, is contingent on OpenAI successfully restructuring from its current nonprofit structure to a Public Benefit Corporation by year-end.
The investment represents the second phase of SoftBank’s $30 billion commitment to OpenAI, following an initial $7.5 billion investment completed in mid-April 2025. Combined with an additional $10 billion syndicated to co-investors, the total transaction reaches $40 billion, making SoftBank one of OpenAI’s largest shareholders alongside Microsoft.
Table of Contents
Investment Breakdown
The $22.5 Billion Approval Details
SoftBank Group’s board authorization marks a critical milestone in CEO Masayoshi Son’s ambitious artificial intelligence strategy. The funding is part of OpenAI’s broader $41 billion financing round that valued the company at $300 billion in early 2025. However, the investment comes with strict conditions tied directly to OpenAI’s corporate transformation.
If OpenAI fails to complete its restructuring by December 2025, SoftBank has indicated it will reduce the total investment to $20 billion instead of the planned $30 billion. This provision protects SoftBank from committing capital to an entity that remains under nonprofit control, which could limit investor returns and complicate future liquidity options.
Timeline and Previous Commitments
SoftBank entered into a definitive agreement with OpenAI on March 31, 2025, outlining a phased investment approach. The first installment of $10 billion was completed by mid-April 2025, while the remaining $30 billion was scheduled for completion by December 2025. The Japanese conglomerate has raised at least $24 billion in loans and bonds throughout 2025 to fund its AI investment push, including a recent $2.9 billion bond sale in October.
This aggressive fundraising reflects SoftBank’s confidence in OpenAI’s long-term potential and aligns with Son’s broader commitment to the $500 billion Stargate Project for AI infrastructure development.
Restructuring Requirements
From Nonprofit to Public Benefit Corporation
OpenAI’s planned transformation from a nonprofit-controlled entity to a Public Benefit Corporation represents one of the most significant corporate restructurings in tech history. The company was founded in 2015 as a nonprofit research organization dedicated to ensuring artificial general intelligence benefits all humanity. In 2019, it created a “capped-profit” subsidiary called OpenAI LP to attract investment while maintaining mission alignment.
The new structure will convert the for-profit limited liability company under the nonprofit into a PBC, with the nonprofit entity retaining majority control and receiving an equity stake valued at over $100 billion. This hybrid approach balances investor demands for traditional profit structures with OpenAI’s original prosocial mission.
What Is a Public Benefit Corporation?
A Public Benefit Corporation is a for-profit entity legally required to balance shareholder returns with broader social and environmental objectives. Unlike traditional corporations focused solely on profit maximization, PBCs must consider how their decisions affect shareholders, stakeholders, and society at large. They are recognized in over 40 U.S. states and must produce annual benefit reports demonstrating their commitment to their stated mission.
Notable tech companies including Anthropic and Elon Musk’s xAI have adopted the PBC structure to attract capital while maintaining mission-driven governance. For OpenAI, the PBC model allows the company to pursue billions in additional investment while preserving oversight by its nonprofit parent organization.
Legal Hurdles and Approval Process
OpenAI is currently working with attorneys general in California, where it is based, and Delaware, where it is legally incorporated, to obtain approval for the restructuring. In April 2025, a group of former OpenAI employees, civil leaders, and academics published an open letter warning that the restructuring could violate OpenAI’s founding purpose and remove corporate safeguards protecting its prosocial mission.
The pressure from regulators and stakeholders led OpenAI to announce in May 2025 that its nonprofit entity would retain control of the company rather than being spun out as an independent entity. Board chair Bret Taylor confirmed the nonprofit would maintain a majority stake in the new PBC structure, though he did not disclose the specific percentage.
Market Valuation Analysis
OpenAI’s $500 Billion Valuation
OpenAI reached a private market valuation of $500 billion in October 2025 following a secondary share sale that allowed current and former employees to sell approximately $6.6 billion worth of stock. This milestone officially established OpenAI as the world’s most valuable privately held company, surpassing SpaceX’s $400 billion valuation.
The $500 billion valuation represents a remarkable 66% increase from the $300 billion valuation achieved during SoftBank’s primary funding round in April 2025. Investors in the secondary sale included SoftBank, Tiger Global, Fidelity, Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price.
Revenue Growth and Financial Performance
OpenAI generated $4.3 billion in revenue during the first half of 2025, a 16% increase over its entire 2024 revenue. The company expects to reach $10 billion in annual revenue for 2025, with projections of $12.7 billion for full-year 2025, nearly triple its 2024 performance. This growth is driven primarily by enterprise adoption of ChatGPT and expanding business-to-business services rather than consumer subscriptions.
However, OpenAI is operating at significant losses, with projected losses of approximately $5 billion for 2024. The company’s $500 billion valuation implies a 39.4x multiple on projected 2025 revenue, placing it in rarefied company among dominant public tech names despite its unprofitable status.
Comparison with SpaceX and Other Tech Giants
OpenAI’s valuation now exceeds that of Netflix, which delivers $39 billion in annual revenue and nearly $10 billion in pre-tax profits. The comparison highlights concerns about potential tech bubble risks, with rapid appreciation reminiscent of previous tech booms. Unlike SpaceX, which generates substantial revenue from commercial satellite launches and government contracts, OpenAI’s business model remains heavily dependent on continued AI adoption and enterprise spending.
Strategic Implications
SoftBank’s AI Strategy
The OpenAI investment anchors CEO Masayoshi Son’s broader vision to position SoftBank at the center of the artificial intelligence revolution. Beyond the direct OpenAI stake, SoftBank has committed to the $500 billion Stargate Project, a joint venture with OpenAI and Oracle to build massive AI infrastructure. Son has also established a Japan-focused AI joint venture with OpenAI to offer enterprise services to corporate customers in the region.
To fund these ambitious commitments, SoftBank has aggressively tapped capital markets, raising over $24 billion in loans and bonds during 2025. The company is also arranging a $5 billion margin loan using its shares in Arm Holdings as collateral to ensure it can complete the OpenAI investment.
Impact on OpenAI’s Shareholders
The completion of SoftBank’s $30 billion investment would solidify its position as one of OpenAI’s largest shareholders, alongside Microsoft, which has invested $13.75 billion. Microsoft maintains significant cloud computing partnerships with OpenAI and must approve any final restructuring plans. Other major investors include Thrive Capital, which led OpenAI’s October 2024 funding round at a $157 billion valuation.
For employees, the $500 billion valuation creates substantial wealth, with even a 0.01% stake now worth $50 million. This dynamic creates powerful retention incentives as OpenAI competes for talent with rivals like Anthropic and Google.
Connection to Stargate Project
The Stargate Project, announced at the White House in January 2025, represents a potential $500 billion investment in AI computing infrastructure over several years. The project involves SoftBank, OpenAI, and Oracle, with President Donald Trump providing political support for the initiative. However, reports indicate the venture has struggled to gain momentum, with more modest goals now targeting the construction of a small data center by year-end rather than the initially ambitious timeline.
Risks and Challenges
Restructuring Timeline Pressure
OpenAI faces significant time pressure to complete its legal transformation by December 2025, the deadline tied to SoftBank’s full investment commitment. The restructuring requires approval from attorneys general in two states and consensus among diverse stakeholders including investors, employees, regulators, and mission-focused advocates. Any delays could trigger SoftBank’s provision to reduce its investment to $20 billion, potentially impacting OpenAI’s growth plans and competitive position.
The complexity of converting a nonprofit-controlled entity into a for-profit PBC while preserving mission alignment has no clear precedent at this scale. Legal experts have warned that the process could take longer than anticipated, especially given the scrutiny from former employees and civic leaders concerned about abandoning OpenAI’s founding principles.
Investment Reduction Scenarios
If the restructuring fails, SoftBank’s reduction of its commitment from $30 billion to $20 billion could have cascading effects on OpenAI’s valuation and fundraising capacity. The $10 billion gap would need to be filled by other investors or through reduced capital expenditure, potentially slowing AI model development and infrastructure expansion. Such a scenario could also signal to the broader market that OpenAI’s governance transformation faces insurmountable obstacles, triggering valuation adjustments.
Market Bubble Concerns
Industry experts have raised concerns about AI valuation bubbles, pointing to OpenAI’s $500 billion valuation despite $5 billion in annual losses. The 39.4x revenue multiple significantly exceeds historical norms for unprofitable companies and suggests investor expectations for extraordinary future growth. If OpenAI’s revenue growth slows or competition intensifies from Google, Anthropic, or other AI companies, the valuation could face substantial downward pressure.
Future Outlook
Path to Public Offering
The restructuring to a Public Benefit Corporation is widely viewed as a precursor to an eventual initial public offering (IPO). The PBC structure provides a governance framework that can support public market listing while maintaining OpenAI’s mission-driven approach. However, the company has not announced any specific IPO timeline, and the path to public markets depends on successfully completing the current restructuring.
An IPO would provide liquidity for early investors including SoftBank and Microsoft, while giving OpenAI access to public capital markets for continued growth. The secondary share sales in 2025 have already provided some employee liquidity, reducing immediate pressure for a public offering.
Industry Impact
SoftBank’s massive investment signals continued confidence in generative AI as a transformative technology despite concerns about valuation levels. The deal could encourage other large institutional investors to make substantial commitments to AI startups, further accelerating the sector’s capital intensity. However, it also raises questions about whether AI companies can generate sufficient returns to justify these unprecedented valuations.
For OpenAI’s competitors, the capital infusion intensifies competitive pressure to secure their own funding and accelerate product development. Companies like Anthropic, Google DeepMind, and xAI must demonstrate differentiated capabilities to attract investor attention in an environment where OpenAI commands overwhelming mindshare and capital.
Comparison Table
| Company | Valuation | Revenue (2025) | Profitability | Structure |
|---|---|---|---|---|
| OpenAI | $500 billion | $10 billion (projected) | -$5 billion loss | Transitioning to PBC |
| SpaceX | $400 billion | Not publicly disclosed | Profitable | Private for-profit |
| Anthropic | Not disclosed | Not disclosed | Not profitable | Public Benefit Corp |
| Netflix | ~$500 billion (public) | $39 billion | $10 billion profit | Public corporation |
Frequently Asked Questions (FAQs)
How much revenue does OpenAI generate?
OpenAI generated $4.3 billion in revenue during the first half of 2025 and expects to reach $10 billion for the full year, with projections of $12.7 billion for 2025. The growth is driven primarily by enterprise ChatGPT adoption and business services.
Who are OpenAI’s major investors?
OpenAI’s major investors include SoftBank ($30 billion commitment), Microsoft ($13.75 billion), Thrive Capital, Tiger Global, Fidelity, Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price. Microsoft also maintains significant cloud computing partnerships with the company.
When will OpenAI go public?
OpenAI has not announced a specific IPO timeline. The restructuring to a Public Benefit Corporation is viewed as preparing the company for an eventual public offering, but completion depends on successfully transforming its governance structure by December 2025.
How does OpenAI compare to SpaceX?
OpenAI’s $500 billion valuation surpasses SpaceX’s $400 billion valuation, making OpenAI the world’s most valuable private company. However, SpaceX generates substantial revenue from commercial and government contracts, while OpenAI operates at approximately $5 billion in annual losses.
What is the Stargate Project?
The Stargate Project is a joint venture between SoftBank, OpenAI, and Oracle announced in January 2025 to build AI infrastructure with a potential $500 billion investment over several years. The project received political support from President Trump but has faced implementation challenges.
Why is SoftBank investing so heavily in AI?
SoftBank CEO Masayoshi Son views artificial intelligence as a transformative technology opportunity and has committed to positioning SoftBank at the center of the AI revolution through investments in OpenAI, the Stargate Project, and Japan-focused AI ventures.
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How much is SoftBank investing in OpenAI?
SoftBank is investing a total of $30 billion in OpenAI, with $7.5 billion completed in April 2025 and the remaining $22.5 billion approved in October 2025 contingent on restructuring completion. The investment is part of a $40 billion transaction including syndicated co-investors.
What is OpenAI’s current valuation?
OpenAI achieved a $500 billion valuation in October 2025 following a secondary share sale, making it the world’s most valuable private company. This represents a 66% increase from its $300 billion valuation in April 2025.
What is a Public Benefit Corporation?
A Public Benefit Corporation (PBC) is a for-profit entity legally required to balance shareholder returns with broader social and environmental objectives. PBCs must produce annual benefit reports and consider impacts on all stakeholders, not just shareholders.
Why is OpenAI restructuring?
OpenAI is restructuring from nonprofit control to a Public Benefit Corporation to attract additional investment while maintaining its mission to develop AI that benefits humanity. The structure allows for traditional equity ownership while preserving nonprofit oversight.
What happens if OpenAI doesn’t complete restructuring?
If OpenAI fails to complete its restructuring by December 2025, SoftBank will reduce its total investment from $30 billion to $20 billion, potentially impacting OpenAI’s growth plans and competitive positioning.
Source: Bloomberg