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OpenAI’s $40 Billion Funding Round: Why Saudi Arabia, India, and UAE Are Investing in AI’s Future


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OpenAI, leading artificial intelligence research company best known for ChatGPT, is raising $40 billion in what could become the largest private funding round in AI history.
SoftBank, a major Japanese technology investment firm with a global track record in high-growth sectors, is leading the deal.
Key investors include Saudi Arabia’s Public Investment Fund (PIF), which is one of the world’s biggest sovereign wealth funds and central to the country’s Vision 2030 economic plan; Reliance Industries, India’s largest conglomerate active in telecommunications, energy, and digital services; and MGX, an Abu Dhabi-based fund dedicated to accelerating technology and artificial intelligence in the UAE.

This funding will support Stargate, OpenAI’s ambitious infrastructure initiative to build state-of-the-art AI data centers optimized for developing and deploying the next wave of foundational models.


1. Background: The Scale of OpenAI’s Ambitions

OpenAI is seeking an unprecedented $40 billion in new funding. This makes it the largest private fundraising effort ever in the artificial intelligence sector, far outpacing recent industry records. The capital is needed to fuel OpenAI’s rapid expansion, support massive ongoing research costs, and finance the construction of purpose-built infrastructure to train and deploy next-generation AI models.


SoftBank, a major player in global technology investments, is leading the round. Other key participants include the Public Investment Fund (PIF) of Saudi Arabia, India’s Reliance Industries, and the Abu Dhabi-based MGX. Each of these groups is expected to contribute hundreds of millions of dollars, motivated by both the promise of returns and the strategic value of close involvement with OpenAI’s future.


This fundraising drive is happening at a time when OpenAI’s operating expenses have soared. Running and training large models like GPT-4 and beyond is a multi-billion dollar annual endeavor, driven by the cost of high-end graphics chips, electricity, and expert talent. For context, public reports now estimate OpenAI’s compute-related operating expenses alone at over $5 billion a year, with total annual costs in the $9 billion range. Keeping up this pace—and staying ahead of competitors—requires a war chest on a new scale.


2. The Role of Saudi Arabia’s Public Investment Fund (PIF)

The Public Investment Fund (PIF) is Saudi Arabia’s sovereign wealth fund, with assets nearing $925 billion. PIF is a cornerstone of the country’s Vision 2030 plan, which aims to transition the Saudi economy away from oil dependence by investing in sectors such as technology, tourism, and renewable energy.


PIF’s interest in OpenAI reflects a national priority: Saudi Arabia is determined to be at the forefront of artificial intelligence and digital transformation in the Middle East. Recent years have seen Saudi authorities publicly commit to large-scale investments in data centers, AI research, and digital infrastructure—often through partnerships involving PIF and Saudi Data & AI Authority (SDAIA).


By acquiring a substantial stake in OpenAI, PIF secures early access to world-leading AI technology, the possibility of tailored research and development for Arabic and regional use-cases, and a seat at the table as foundational AI systems become integrated into everything from education to industrial automation. The move is also a strong signal that Saudi Arabia wants to be viewed as a global tech player, not just a consumer of digital tools developed abroad.


3. Strategic Interests of Other Major Investors

Reliance Industries (India) is among the world’s most diversified conglomerates, with operations spanning oil refining, telecom, retail, and tech. Through its digital subsidiary, Jio Platforms, Reliance operates India’s largest mobile and broadband networks, making it a major driver of digitalization on the subcontinent. Jio is building what it claims will be the world’s largest AI compute park, with plans for over 2 GW of dedicated power for high-performance AI workloads. By investing in OpenAI, Reliance aims to ensure direct access to frontier models and future technology—giving it a competitive edge as India’s appetite for AI-powered services grows.


MGX (UAE), a relatively new but rapidly expanding technology investment fund, already holds shares in OpenAI. The UAE has identified AI and cloud computing as strategic pillars of its economic future. MGX’s deepening partnership with OpenAI aligns with a government-led push to build local data centers, incubate AI startups, and attract global tech talent to the region.


SoftBank (Japan) is best known for its Vision Fund, one of the largest technology-focused investment pools in history. While Vision Fund results have been mixed, SoftBank’s appetite for ambitious, infrastructure-heavy projects remains strong. In this new OpenAI round, SoftBank provides both capital and structuring expertise, and will likely help connect OpenAI to key technology partners in Asia and beyond.


4. Stargate: OpenAI’s Next-Generation AI Infrastructure

A core reason for this enormous funding round is Stargate—OpenAI’s most ambitious infrastructure project yet. Stargate represents a decisive shift from renting generic cloud capacity (mainly from Microsoft Azure) to building dedicated AI data centers designed from the ground up for the needs of large-scale model training and deployment.


What Makes Stargate Different?

  • Custom Hardware: Stargate data centers will use specialized chips (including Nvidia Blackwell GPUs, custom ARM-based CPUs, and potentially OpenAI-designed ASICs) tailored to run the latest AI models with maximum efficiency.

  • High-Speed Networks: These sites will be built with ultra-fast optical networking, enabling thousands of servers to operate together as a single supercomputer with extremely low latency.

  • Sustainable Power: Stargate’s U.S. launch site, confirmed as Abilene, Texas, will leverage clean energy sources and advanced cooling technology to keep operational costs and environmental impact down.

  • Massive Scale: The first phase targets over 10 exaflops of sustained AI compute—many times more powerful than what’s available to OpenAI today. This scale is necessary to train trillion-parameter models, enable advanced research, and serve millions of users simultaneously.


Why Build, Not Rent?

Relying exclusively on third-party cloud providers has become both too expensive and too restrictive for OpenAI’s needs. Owning the full hardware and software stack allows OpenAI to:

  • Cut long-term costs by optimizing everything for AI workloads.

  • Directly control security, privacy, and reliability standards.

  • Experiment with new hardware and data-center layouts without being limited by public-cloud offerings.

  • Offer priority access to key international partners (like PIF, Reliance, and MGX), making their investment more attractive.

Stargate is also a strategic play: by building the world’s largest, most advanced AI infrastructure, OpenAI can solidify its leadership in the sector while offering compute “slices” to investors and preferred partners, transforming capex into long-term recurring revenue.


5. Geopolitical and Technical Implications

The involvement of Saudi Arabia, India, and the UAE reflects a global shift in technology investment priorities. These countries are not just looking for financial returns; they want direct involvement in the next wave of digital infrastructure, much as they did with energy, telecom, or logistics in previous decades.


This multi-national syndicate approach means that future AI capacity—and, crucially, early access to top-tier models—will be distributed more widely than if one U.S. or Chinese giant controlled everything. However, it also raises new regulatory and ethical questions. U.S. regulators (including CFIUS) and their European counterparts are watching closely to ensure that technology transfers, data sovereignty, and national security are respected. Export controls now limit the shipment of the very latest AI chips to some regions, and any deal structure must comply with these complex international rules.


Proponents argue that pooling resources across countries is the only way to build infrastructure at the scale AI now demands, and that shared ownership can help align interests, dilute single-nation dominance, and speed up the responsible deployment of advanced models.


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