Masayoshi Son and Sam Altman’s Unprecedented Partnership
When Masayoshi Son and Sam Altman first met in 2017 at SoftBank’s offices in Tokyo, the younger entrepreneur lacked a project large enough to tempt the tech billionaire to open his chequebook. Over the next two years, as Altman’s OpenAI evolved into one of the world’s most potent artificial intelligence companies, Son tried to invest close to $1 billion in the ChatGPT maker. Altman refused.
A $40 Billion Investment
Altman opted for Microsoft, which could provide the computing power needed to turbocharge his company’s growth, according to a person with direct knowledge of the decision. OpenAI has since become one of the fastest-growing start-ups of all time and is straining to grow beyond its partnership with Microsoft. This has cleared a path for SoftBank to lead the largest-ever start-up investment – a $40 billion round into OpenAI. In return, Son gets something he craves: a place at the center of the AI world.
Stargate: A $500 Billion AI Data Center Project
On stage in Tokyo, the two men discussed a connected plan: a $500 billion AI data center project dubbed "Stargate." Son, a few years shy of 70, still reveling in his abilities as a showman, sat across from Altman, nearly 30 years his junior and a man who seemed less at ease in front of a crowd.
The Conviction of AGI
For all their differences, they share a conviction that the era of artificial general intelligence – when machines can outperform humans across cognitive fields – is at hand, and that exponentially more powerful superintelligence will follow.
The Deal
The deal Son and Altman are putting together is unprecedented in size and structure, with talks between SoftBank and OpenAI playing out over two stages, according to people with knowledge of the plans. First, there is an exclusive funding round in which SoftBank has committed to invest up to $40 billion in OpenAI. SoftBank is not expected to provide the full amount on its own and has the right to bring other partners into the funding round. OpenAI can approve or veto the new investors, according to a person with direct knowledge of the plans.
Stargate: A Joint Venture
In the second phase, SoftBank is planning to initially put about $15 billion to $20 billion into Stargate. OpenAI, with new money from the SoftBank round, has agreed to match whatever figure SoftBank puts into the infrastructure project. Partners including MGX, the Abu Dhabi state-owned fund, and a Stargate equity investor, intend to make further investment decisions once they see progress on the project, according to three people with knowledge of the plans.
Conclusion
The deal fits Son’s record of taking leaps of faith, backed by billions in capital, often overriding the recommendations of his lieutenants. His search for the next big thing has also resulted in numerous dramatic losses, including $14.2 billion on Adam Neumann, the founder of WeWork, which eventually tumbled into bankruptcy.
FAQs
Q: What is Stargate?
A: Stargate is a $500 billion AI data center project.
Q: How much is SoftBank investing in Stargate?
A: SoftBank is planning to initially put about $15 billion to $20 billion into Stargate.
Q: What is OpenAI’s valuation after the SoftBank investment?
A: OpenAI’s valuation is expected to be around $260 billion after the SoftBank investment.
