SoftBank Proposes $1.5 Billion Investment in OpenAI at $157 Billion Valuation
SoftBank Group, a multinational investment holding company, has proposed to acquire $1.5 billion in OpenAI shares. OpenAI employees can sell their shares at a price of $210 each as part of this deal.
Employees have until December 24 to decide on the offer. This investment follows OpenAI's recent funding round of $6.6 billion, raising its valuation to approximately $157 billion.
Masayoshi Son, founder and CEO of SoftBank, noted that this investment builds on a previous $500 million stake in OpenAI, reinforcing SoftBank's involvement in the AI sector. As an early investor in Arm Holdings plc (NASDAQ: ARM), SoftBank aims to enhance its footprint in AI during its mainstream adoption. The Vision Fund, SoftBank's technology-focused investment vehicle, manages over $100 billion in capital.
OpenAI and the Market Outlook
OpenAI's growth in the AI sector is supported by substantial investments over the years. The successful launch of ChatGPT, which has attracted over 250 million weekly active users, has significantly contributed to OpenAI's success.
Key investors in OpenAI include Thrive Capital, Microsoft Corporation, and chipmaker Nvidia. OpenAI is reportedly considering restructuring to a for-profit model amid increasing competition from other generative AI firms.
This transition has elicited mixed reactions, particularly from original investors led by Elon Musk. Nonetheless, OpenAI's CEO Sam Altman has indicated ambitions for the company to lead the generative AI industry, projected to become a trillion-dollar sector in the near future.
Impact on AI-related Crypto Tokens
The market cap for AI-related cryptocurrencies has significantly increased over the past two years, reaching about $40.8 billion with a daily trading volume of around $5.2 billion.
Top-performing AI-related crypto projects include Near Protocol (NEAR), Internet Computer (ICP), Bittensor (TAO), and Virtuals Protocol (VIRTUAL). These tokens typically provide holders governance rights within their respective projects.
Investments from traditional capital markets into the AI sector are expected to influence related cryptocurrency projects. Additionally, as Bitcoin shows diminishing returns, the rotation of cash in the crypto market may increasingly favor altcoins.