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You are at:Home » Softbank’s Masayoshi’s son and Openai’s Sam Altman bet on AI – and each other
AI

Softbank’s Masayoshi’s son and Openai’s Sam Altman bet on AI – and each other

Adnan MaharBy Adnan MaharFebruary 7, 2025No Comments6 Mins Read1 Views
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When Masayoshi’s son and Sam Altman first met in Tokyo’s Softbank office in 2017, the young entrepreneur lacked a project big enough for a tech billionaire to put out a checkbook.

Over the next two years, Son has sought to invest nearly $1 billion in ChatGpt makers as Altman’s Openai has evolved into one of the world’s most powerful artificial intelligence companies.

Altman refused.

Instead, he chose Microsoft. This can provide the computing power needed to turbo-charge the company’s growth, according to people with direct knowledge of decisions.

Altman’s Openai has since become one of the fastest growing startups of all time, and is nervous to grow beyond its partnership with Microsoft. This has launched SoftBank’s path to leading the biggest emerging investments ever. In return, his son gets what he longs for: a place at the heart of the AI ​​world.

On stage in Tokyo this week, the two men discussed a connected plan. It is called “Stargate,” a $500 billion AI data center project. His son, shy, 70 years old, still enjoys his ability as a showman, sat across from Altman, a junior for nearly 30 years, and seemed relieved in front of the crowd.

Regarding all their differences, they believe that when machines can surpass humans across cognitive fields, an age of artificial general information is at hand, and exponentially stronger urgent matters continue. We share.

“When I met you when you were young. . You said you were going to AGI and I immediately said, “I believe in you. My son was in the Altman of Tokyo.” He said, “From there I was a follower. I had no doubt. Most people back then thought you were crazy, right?”

“Some people think you’re crazy, too. It all goes well,” replied Altman.

According to people with knowledge of planning, what his son and Altman are bringing together is the unprecedented size and structure in size and structure, and the talk between SoftBank and Openai unfolds in two stages.

First, there is an exclusive funding round in which SoftBank has pledged an investment of up to $400 billion in Openai. SoftBank is not expected to provide the full amount on its own and is entitled to bring other partners into the funding round. According to those who know first-hand the plan, Openai can approve or reject new investors.

The funding round is expected to value Openai with a pre-valuation of $260 billion. “It’s Masa’s round, but Masa will be allowed to take other investors to Openai in limited quantities,” said one person involved in the discussion.

In the second phase, SoftBank plans to first place around $15 billion to $20 million in Stargate. Openai agreed to match the Japanese group’s new money with Softbank Round’s.

According to three people with knowledge of the planning, partners such as MGX, Abu Dhabi National Fund and Stargate Equity Investors will make further investment decisions once the project progress occurs.

Openai and Softbank declined to comment.

This deal fits the record of his son, who has made a leap of faith backed by billions of people in the capital, and often negates the recommendations of the EU within him.

Just a year after Alibaba was founded, his bet on Jack Ma was his son billions and falsified his reputation as a star investor.

His search for the next big thing caused numerous dramatic losses, including the $14.2 billion of WeWork founder Adam Neumann, who ultimately fell into bankruptcy. At some point, some of his son’s own supporters must reject his attempts to invest billions in Neumann’s company, according to those with knowledge of the decision. Not there.

“Masa’s Achilles heels are just him in love with these visionary young men,” said one person who worked closely with him.

Stargate’s plans have been put together rapidly over the past few months. Often, their son and Altman slam the details without an advisor, said those familiar with the process.

“Until three months ago, Sam was dating… But in the past few months he decided to commit to Masa,” said one person close to Softbank.

Some of his son’s advisors are trying to hold him down again, noting that Altman has his own motives.

“(Sam) is no longer running a boot. It’s a big company with great ambitions. Someone who is familiar with Microsoft’s thinking said.

Like the two main characters, the core executive team was tasked with considering the details. This was Sarah Friar of Peter Hoeschele, Chief Financial Officer of Openai, who was responsible for Openai’s infrastructure buildout, Rene Haas, ARM CEO, and SoftBank executive Vikas Parekh.

Stargate is designed solely for Openai use, based on the assumption that demand for the San Francisco-based group’s computing power continues to skyrocket. However, one person with direct knowledge of the joint venture said Openai has not signed an agreement to guarantee its use.

“Stargate trading is not a standard trading. … (the son) needs to build this with the belief and understanding that Openai wants to do the calculations. But there is no contract,” they say. I did.

Openai expects Stargate to sign an agreement to use the site it develops or invests in, and according to people near the company, they can ultimately open the project to other customers. Another person familiar with SoftBank’s ideas said they wouldn’t start building a data center if such a contract wasn’t in place.

Openai in a paper last year claimed that “infrastructure is destiny” and that Altman was bullish about the company’s ability to beat rivals to well-resourced AGIs.

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Chinese flag montage, view of Silicon Valley in California, USA, deep seek logo on phone, and Openai logo

However, more efficient AI models have emerged, such as the R1 of Chinese AI company Deepseek, challenging assumptions about the benefits of scale.

Slowing demand for large data centers will create serious problems for Stargate. “If there’s no operating demand for Openai, there’s something I had in the semiconductor cycle: empty fabs (semiconductor manufacturing plants),” said an investor who worked with his son. “It’s very bloody and very ugly.”

The novel arrangements lock his son into Altman and link SoftBank’s fate to Openai’s ability to continue to expand both its assessment and data center demand. The two groups also bring together joint ventures in Japan to sell Openai products, and Softbank Group Companies has pledged to spend an additional $3 billion a year on Openai services.

“At this point, what’s good for Sam is good for Masa,” said someone familiar with the pair. He said his son’s plans remain larger than open, including moving towards chip production.

The same people also argue that all of his son’s biggest moves are not due to personal beliefs, but emphasize bets to win arms. The UK chip designer, listed last year and still owns nearly 90% by SoftBank, gave his son the possibility of accessing billions of dollars in funds and secured loans, giving him a core part of the AI ​​sector. Ta.

“All hedge funds, entrepreneurs and technicians are thinking, ‘How do you cut it down with Sam Altman?'” said one major investor. “Can Masa’s money make him a lead that is impossible to attack?”

Additional Reports by Michael Acton of San Francisco

Video: AI is changing the world of work, are you ready? |Work it ft



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Adnan Mahar
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Adnan is a passionate doctor from Pakistan with a keen interest in exploring the world of politics, sports, and international affairs. As an avid reader and lifelong learner, he is deeply committed to sharing insights, perspectives, and thought-provoking ideas. His journey combines a love for knowledge with an analytical approach to current events, aiming to inspire meaningful conversations and broaden understanding across a wide range of topics.

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