SoftBank is in talks to pour up to $25 billion into OpenAI, a move that could make the Japanese giant the company’s biggest single investor. This potential deal is part of a broader partnership that might see SoftBank channel over $40 billion into artificial intelligence projects with the Microsoft-backed startup, according to recent reports.

The investment would surpass Microsoft’s contributions to OpenAI, which first backed the ChatGPT creator in 2019. The discussions follow a joint announcement by both firms to invest $100 billion in Stargate, a U.S. data center initiative for OpenAI that could balloon to $500 billion over four years.

Besides its $15 billion commitment to Stargate, SoftBank is reportedly considering a direct equity investment of $15 to $25 billion into OpenAI. This funding could help cover OpenAI’s $15 billion share in the Stargate project, reducing its reliance on Microsoft for computing resources.

The talks come at a fascinating time for the AI industry. Earlier this week, Chinese company DeepSeek released its R1 model, causing ripples in the market. Nvidia, for instance, saw a massive $589 billion drop in a single day before partially recovering. Investors are questioning whether such heavy investments in AI hardware are necessary, especially if smaller, more cost-effective models like R1 can deliver similar results.

OpenAI has accused DeepSeek of using its proprietary tech to train R1 through a process called “distillation,” which is against OpenAI’s terms of service. However, SoftBank’s potential investment signals confidence in OpenAI’s future, marking its biggest move since the $16 billion WeWork investment.

If finalized, the deal could also help OpenAI transition toward becoming a for-profit entity, making it easier to raise additional funds. Around 20% of Stargate’s funding is expected to come from equity, with the rest financed through debt secured against assets and cash flow.

This partnership could reshape the AI landscape, reducing OpenAI’s dependence on Microsoft while giving SoftBank a significant foothold in the rapidly evolving AI sector.