OpenAI has raised $11 billion in the first part of a funding round valuing the company at $1.25 trillion, below its earlier target of up to $30 billion at about $1.4 trillion.
OpenAI has raised $11 billion in the first part of a funding round that values the company at $1.25 trillion, according to Bloomberg. The round has not yet closed and could reach about $20 billion in the coming weeks.
The $1.25 trillion valuation is below OpenAI’s initial target. In late September, Bloomberg reported OpenAI was seeking to raise approximately $30 billion at a valuation of about $1.4 trillion. Yahoo Finance reports that two investors put the first ask at $1.5 trillion, while OpenAI’s CFO, Sarah Friar, said on air that the higher figure started with a media report and never came from OpenAI. Friar confirmed the $1.25 trillion pre-money valuation in a TV interview. OpenAI declined to comment on the funding.
The new valuation marks a rise from March, when OpenAI raised $122 billion at an $852 billion valuation. Friar called the price almost 50% above March, though Yahoo Finance notes the implied step-up is roughly 46.7% and should be treated as approximate because the March basis is unclear.
SoftBank and Abu Dhabi’s MGX participated in the round, according to Yahoo Finance. The Daily Star also reports SoftBank and MGX participated. Lead investors, terms, and use of proceeds were not disclosed.
The smaller round comes as tech stocks have sold off. The Verge reports the decline followed tech stock drops and midterm results showing public opinion has turned against AI companies and data center projects. TechCrunch reports the Democratic Party’s strong performance in the U.S. midterm elections and negative voter sentiment around data centers have caused market jitters, with many anticipating potential regulatory challenges.
Rival Anthropic is also facing lower valuation expectations. Yahoo Finance reports some investors now value Anthropic near $1.5 trillion, down from roughly $2 trillion. TechCrunch reports some potential buyers believe Anthropic’s valuation could be as low as $1.1 trillion, compared with the $2 trillion investors were said to be expecting roughly a month ago. The Daily Star cites a Reuters report stating investors are valuing Anthropic’s planned IPO at about $1.5 trillion, below earlier expectations of roughly $2 trillion.
OpenAI has delayed its plans to go public. The Verge reports CEO Sam Altman said OpenAI is holding off on its own IPO until it can make more confident claims about its models’ safety, and that he said, “I think it’s also kind of bad for the world if OpenAI waits too long to go public.” TechCrunch reports expectations that the company will IPO at some point in 2027.
The funding shows investors remain willing to back leading AI developers, but at lower valuations than earlier targets. The gap between OpenAI’s initial $30 billion goal and the current roughly $20 billion expected total illustrates a more cautious investment environment for AI companies amid market volatility and regulatory uncertainty.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
The day's checked news, by email
One short email a day with the top stories. Free, and you can unsubscribe in one click.
Or follow for the latest news:
No comments yet. Start the discussion.
A US intelligence memo alleges China's Ministry of State Security recruited Alice Huang, an executive at Singapore-based Megaspeed, to gather information on Nvidia CEO Jensen Huang. Nvidia and China deny the allegations.
Rights holders for Elvis Presley and Eminem's publisher have filed separate lawsuits against AI music company Suno, alleging it generates music and lyrics that imitate the artists without permission.
