Jamie Spencer
Massive investment eclipses all previous private funding rounds
SoftBank has committed up to $40 billion in financing to OpenAI, marking the largest startup investment in history. The figure dwarfs all previous venture rounds, including Microsoft’s $10 billion OpenAI investment in 2023 and Databricks’ $10 billion Series J round earlier this year.
SoftBank’s latest bet also surpasses its own $9.5 billion WeWork deal from 2019, which ultimately failed as WeWork filed for bankruptcy four years later.
Complex financing structure
Rather than a conventional venture round, the SoftBank-OpenAI deal includes $10 billion from a syndicate of co-investors and $30 billion directly from SoftBank. OpenAI is expected to receive the entire $40 billion by year-end. The deal pegs OpenAI’s post-money valuation at $300 billion, contingent on a restructuring of its for-profit arm.
Sky-high valuations in private tech
The OpenAI financing underscores a broader trend of ultra-high valuations in private markets. At least seven U.S. venture-backed companies are currently valued above $45 billion. Notable examples include:
- SpaceX: Reportedly valued at $350 billion in a secondary sale.
- Stripe: Reached $91.5 billion in a liquidity-focused tender offer.
- xAI: Valued at $80 billion after its acquisition of X (formerly Twitter).
- Databricks: Closed $10 billion in funding at a $62 billion valuation.
- Anthropic: Raised $3.5 billion at a $61.5 billion valuation in March.
- Waymo: Closed a $5.6 billion Series C at a $45 billion valuation.
Changing exit dynamics
Private valuations have remained robust as investors show a growing tolerance for holding late-stage shares. Traditional pressure to go public has waned, as long-term value growth in private markets keeps returns attractive.
