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OpenAI assembles record private funding round

OpenAI assembles record private funding round

Money Moves
By Newzino Staff |

Nvidia, SoftBank, and Amazon negotiate stakes in a round that could exceed $100 billion and value OpenAI above $800 billion

Yesterday: Nvidia Reaches Terms on $30B Equity Investment

Overview

In October 2024, OpenAI raised $6.6 billion at a $157 billion valuation—already an enormous sum for a private company. Seventeen months later, the maker of ChatGPT is finalizing a single funding round that could exceed $100 billion, with Nvidia committing up to $30 billion, SoftBank negotiating another $30 billion, and Amazon in talks for as much as $50 billion. If completed, the round would value OpenAI at roughly $830 billion and represent the largest private capital raise in history by a wide margin.

The Nvidia deal alone marks a significant structural shift. In September 2025, the chipmaker signed a letter of intent to invest up to $100 billion in OpenAI, tied to the deployment of 10 gigawatts of data center capacity using Nvidia hardware. That arrangement stalled—Nvidia warned investors in November it had "no assurance" the deal would close. The new $30 billion commitment is a straightforward equity stake with no deployment milestones attached, decoupling Nvidia's financial bet from its hardware sales relationship with OpenAI. The revision simultaneously shrinks Nvidia's exposure and deepens its alignment: it becomes a major OpenAI shareholder while remaining its primary chip supplier.

Key Indicators

$100B+
Potential round size
Combined commitments from Nvidia, SoftBank, Amazon, and other investors in OpenAI's latest funding round
$730B
Pre-money valuation
OpenAI's implied valuation before the new capital, up from $300 billion in April 2025
$30B
Nvidia's equity stake
Replaces a $100 billion milestone-linked commitment announced in September 2025
~$9B
OpenAI's 2025 net loss
The company spent roughly $1.69 for every dollar of revenue it generated in 2025

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People Involved

Sam Altman
Sam Altman
Chief Executive Officer, OpenAI (Leading negotiations on multiple fronts of the funding round)
Jensen Huang
Jensen Huang
Chief Executive Officer and Co-founder, Nvidia (Finalizing $30 billion equity investment in OpenAI)
Masayoshi Son
Masayoshi Son
Chief Executive Officer, SoftBank Group; Chairman, Stargate LLC (Negotiating $30 billion additional investment in OpenAI)

Organizations Involved

OpenAI
OpenAI
Artificial Intelligence Company (Public Benefit Corporation)
Status: Raising record-breaking funding round

The creator of ChatGPT and GPT-series large language models, OpenAI restructured from a nonprofit to a for-profit public benefit corporation in October 2025 to enable large-scale outside investment.

Nvidia Corporation
Nvidia Corporation
Semiconductor Company
Status: Finalizing $30B equity investment in OpenAI

The dominant supplier of graphics processing units used to train and run artificial intelligence models, Nvidia's chips power the majority of the world's AI infrastructure including OpenAI's data centers.

SoftBank Group
SoftBank Group
Technology Investment Conglomerate
Status: Negotiating $30B additional investment in OpenAI

A Japanese technology investment conglomerate that has become one of OpenAI's largest backers, having led its $40 billion round in April 2025 and co-founded the $500 billion Stargate data center venture.

Amazon
Amazon
Technology and Cloud Computing Company
Status: In talks to invest up to $50B in OpenAI

Amazon Web Services signed a $38 billion cloud deal with OpenAI in November 2025 and is now negotiating a direct equity investment of up to $50 billion that would also involve OpenAI's use of Amazon's custom AI chips.

Timeline

  1. Nvidia Reaches Terms on $30B Equity Investment

    Funding

    Nvidia neared final terms on a $30 billion direct equity stake in OpenAI at a $730 billion pre-money valuation, replacing the stalled $100 billion milestone-linked deal.

  2. Full $100B+ Round Takes Shape

    Funding

    Reports indicated OpenAI was finalizing a round exceeding $100 billion at a valuation above $850 billion, with Nvidia, SoftBank, and Amazon as anchor investors.

  3. Amazon-OpenAI Talks Expand to Include Alexa

    Partnership

    Reports indicated OpenAI models could help power Amazon's Alexa voice assistant as part of the broader investment discussions.

  4. Reports Surface That $100B Deal Is 'On Ice'

    Report

    Media reports indicated negotiations had stalled, with some inside Nvidia expressing doubts about OpenAI's business model. Both chief executives publicly denied tension.

  5. Nvidia CFO Confirms Deal Still Not 'Definitive'

    Disclosure

    Nvidia's chief financial officer Colette Kress acknowledged the $100 billion OpenAI deal remained unsigned, more than two months after it helped fuel an AI stock rally.

  6. Nvidia Files 'No Assurance' Warning

    Disclosure

    Nvidia disclosed in a quarterly filing that there was "no assurance" it would finalize the $100 billion OpenAI deal, signaling internal doubts about the transaction's structure.

  7. Amazon Signs $38B Cloud Deal with OpenAI

    Partnership

    OpenAI committed to spending $38 billion on Amazon Web Services over seven years for access to Nvidia GPUs and cloud infrastructure.

  8. OpenAI Completes For-Profit Restructuring

    Corporate

    OpenAI reorganized into a public benefit corporation, with the nonprofit OpenAI Foundation retaining 26% ownership and Microsoft receiving a 27% stake.

  9. Nvidia Signs $100B Infrastructure Letter of Intent

    Partnership

    Nvidia and OpenAI announced a non-binding agreement under which Nvidia would invest up to $100 billion as OpenAI deployed 10 gigawatts of Nvidia-powered data center capacity.

  10. SoftBank Leads $40B Round at $300B Valuation

    Funding

    OpenAI raised $40 billion in what was then the largest private technology deal in history, with SoftBank as lead investor. Microsoft, Coatue, Altimeter, and Thrive also participated.

  11. Stargate Project Announced at the White House

    Partnership

    President Trump, alongside Altman, Son, and Oracle's Larry Ellison, unveiled a $500 billion AI data center joint venture called Stargate, with SoftBank as chairman.

  12. OpenAI Raises $6.6B at $157B Valuation

    Funding

    OpenAI closed a funding round with Microsoft, Nvidia, SoftBank, and others. The investment carried a condition: the company must convert to a for-profit structure or the funds would become debt.

Scenarios

1

Round Closes Above $100B, OpenAI Files for IPO

Discussed by: TechCrunch, Caproasia, and multiple Wall Street analysts tracking OpenAI's trajectory

All three anchor investors—Nvidia, SoftBank, and Amazon—finalize their commitments, bringing the round above $100 billion. The capital injection funds OpenAI's $600 billion compute spending plan through 2030 and positions the company for an initial public offering in late 2026 or 2027 at a valuation approaching $1 trillion. OpenAI's chief financial officer Sarah Friar has told associates the company is targeting a 2027 listing, and the for-profit restructuring completed in October 2025 removed the final structural barrier.

2

Round Shrinks as One or More Investors Pull Back

Discussed by: Business Standard, The Information, and analysts who noted the $100B Nvidia deal's collapse as a precedent

One or more anchor investors reduce their commitments or drop out, shrinking the round significantly. Amazon's talks—which involve OpenAI adopting Amazon's custom Trainium chips—face the same structural complications that stalled the original Nvidia deal. OpenAI still raises tens of billions but at a lower valuation, and the IPO timeline slips as the company's $9 billion annual losses continue to require fresh capital.

3

Circular Funding Draws Regulatory or Investor Scrutiny

Discussed by: TechCrunch, which flagged the 'circular deals' dynamic, and financial analysts questioning the structure

The intertwined nature of these deals—Amazon invests in OpenAI, OpenAI spends $38 billion on Amazon's cloud; Nvidia takes equity, OpenAI buys Nvidia chips—attracts scrutiny from regulators or skeptical institutional investors. Questions about whether the investments represent genuine capital allocation or subsidized customer acquisition could complicate the IPO process or trigger antitrust review, particularly given the Federal Trade Commission's existing interest in AI industry concentration.

4

AI Spending Boom Cools, OpenAI's Losses Force a Reckoning

Discussed by: Medium's Will Lockett, Naked Capitalism, and analysts projecting $143 billion in cumulative negative free cash flow through 2029

If demand for AI products plateaus or a competing open-source model erodes OpenAI's pricing power, the company's path to profitability—which it projects for 2029 or 2030—becomes less credible. Investors who poured in at a $730 billion-plus valuation face significant markdowns. The parallel to SoftBank's Vision Fund era, where massive capital commitments preceded a wave of down rounds and writedowns, becomes harder to dismiss.

Historical Context

SoftBank Vision Fund and WeWork (2017-2019)

2017-2019

What Happened

SoftBank invested approximately $16 billion in WeWork through its Vision Fund and other vehicles, pushing the coworking company's valuation to $47 billion. WeWork's September 2019 initial public offering filing revealed unsustainable losses, and the IPO collapsed. Within weeks, WeWork's implied valuation fell 83% to $8 billion, and SoftBank assembled a $9.5 billion rescue package.

Outcome

Short Term

WeWork abandoned its IPO, ousted its founder-CEO Adam Neumann, and accepted a SoftBank bailout that gave the Japanese conglomerate effective control of the company.

Long Term

The episode became shorthand for the dangers of massive private-market overvaluation. SoftBank's Vision Fund I ultimately recovered much of its losses through other bets, but investor confidence in mega-round private market valuations took years to rebuild.

Why It's Relevant Today

SoftBank is again one of the largest investors in a money-losing private company seeking a valuation in the hundreds of billions. The key difference: OpenAI's revenue is growing rapidly (from $3.7 billion in 2024 to roughly $13 billion in 2025), whereas WeWork never had a credible path to profitability. The key similarity: the sheer scale of capital at risk if growth assumptions prove wrong.

Microsoft's $150 Million Investment in Apple (1997)

August 1997

What Happened

Microsoft invested $150 million in Apple at a time when the computer maker was near bankruptcy. The investment came with agreements for Microsoft to continue developing Office for the Mac and to settle patent disputes. Steve Jobs announced the deal at Macworld to a chorus of boos from Apple loyalists who saw it as capitulation to a rival.

Outcome

Short Term

The investment stabilized Apple financially and signaled market confidence, helping reverse a multiyear stock decline.

Long Term

Apple went on to become the world's most valuable company. Microsoft sold its shares by 2003, missing out on hundreds of billions in gains. The deal demonstrated that a strategic investment by a dominant platform company in a key partner can reshape an entire industry.

Why It's Relevant Today

Nvidia's equity investment in OpenAI mirrors the structural logic: a dominant supplier (Microsoft made the software, Nvidia makes the chips) takes a financial stake in a company that is simultaneously its largest customer and potential competitor. The question is whether Nvidia is buying into a transformative partner or subsidizing a customer whose long-term hardware choices remain uncertain.

AOL-Time Warner Merger (2000)

January 2000 - January 2001

What Happened

At the peak of the dot-com bubble, America Online acquired Time Warner for $164 billion in what was then the largest corporate merger in history. AOL's stock price had inflated its market value to over $200 billion on the promise that internet connectivity would transform media. The deal closed in January 2001.

Outcome

Short Term

The combined company wrote down nearly $99 billion in value within two years as AOL's dial-up business collapsed amid the rise of broadband.

Long Term

The merger became the defining cautionary tale of using inflated valuations to acquire real assets. Time Warner eventually spun off AOL in 2009 at a fraction of the original price.

Why It's Relevant Today

The parallel is not in the deal structure but in the valuation question. OpenAI's $730 billion pre-money valuation is roughly 56 times its 2025 revenue, at a time when the company projects losses through 2028. If artificial intelligence revenue growth follows the trajectory its backers expect, the valuation looks prescient. If growth slows, it risks looking like another case of capital chasing hype at historic scale.

17 Sources:
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