SoftBank dethroned Microsoft as OpenAI's largest investor, pushing the ChatGPT maker's market cap to $300 billion — but reportedly buried itself in debt

Microsoft has seemingly taken a backseat from its multi-billion-dollar partnership with OpenAI, especially after the ChatGPT maker announced its $500 billion commitment to its Stargate project alongside SoftBank.

The move stormed the tech industry with Salesforce CEO Marc Benioff predicting that Microsoft won't use OpenAI in the future for its AI efforts.

While Microsoft has since lost its exclusive cloud provider status with OpenAI, it holds the “right of first refusal,” making it the first option to host OpenAI workloads in its cloud infrastructure and services.

Microsoft has been intimately involved in OpenAI's funding rounds, raising $6.6 billion alongside NVIDIA, Thrive Capital, and SoftBank in the ChatGPT maker's funding round from late last year. This saved OpenAI from the cusp of making a $5 billion loss within 12 months, which would have manifested into bankruptcy.

More recently, OpenAI closed its latest round of funding, where it managed to raise $40 billion from investors, pushing its market cap to $300 billion (via CNBC). It's arguably "the largest private tech funding round on record," according to PitchBook.

Interestingly, SoftBank led the round with $30 billion, with the remaining $10 billion raised by key investors, including Microsoft and Thrive Capital. OpenAI will leverage the raised funds to scale greater heights in AI scaling and development.

SoftBank may dethrone Microsoft at the cost of bankruptcy

In a report by The Wall Street Journal (WSJ), SoftBank might be biting a little bit more than it can chew with its exorbitant investment in OpenAI. According to the outlet, $10 billion of SoftBank's mega investment will be borrowed from Japanese bank Mizuho.

The $10 billion deal is expected to be completed in April, while the remaining amount is set to come by early 2026. SoftBank is betting big on OpenAI, indicating that we're on the verge of a new phase led by artificial intelligence. In fact, SoftBank believes OpenAI is "closest to achieving Artificial General Intelligence."

However, financial experts are skeptical about the future of AI and its profitability. According to Ratings agency S&P Global, "SoftBank’s financial condition will likely deteriorate." The agency attributes its deductions to SoftBank's investment in OpenAI, which will likely plunge it into debt and dismal ratings.

To this end, AI labs have struggled to establish clear profitability in the landscape. Experts suggest investor interest is quickly fading, which could be an indication that they'll soon channel their funds elsewhere. Interestingly, they predict Microsoft could acquire OpenAI within the next 3 years.