OpenAI told investors on 22 October that it aims to secure signatures by 30 October for a funding round of up to $30 billion at a $1.25 trillion pre-money valuation, CNBC reported, citing people familiar with the deal. The San Francisco-based AI company is seeking capital ahead of a potential public listing. Investors from the United Arab Emirates and Coatue are leading the financing, the people said.
Key points
- OpenAI is seeking signatures by 30 October, while the final amount it will raise is still being determined.
- The $1.25 trillion valuation is before any money from the proposed round is added.
- UAE investors and Coatue are leading a financing positioned as a bridge to a possible IPO.
- Anthropic closed a $65 billion round at a $965 billion valuation in May.
UAE investors and Coatue lead the round
The $1.25 trillion price is a pre-money valuation, excluding whatever OpenAI raises in the round. Its final size is still being determined, according to the people familiar with the deal. OpenAI had previously sought a higher price: AI Affairs reported a reduction in its valuation target from $1.4 trillion to $1.25 trillion.
People familiar with the financing described UAE investors and Coatue as its leaders. Separately, OpenAI is negotiating a commercial arrangement for additional computing capacity from the UAE, one person told CNBC. The investment and computing discussions put capital and capacity alongside each other in the company’s plans, though the proposed funding amount remains a ceiling rather than a completed raise.
OpenAI told investors in February that it was targeting roughly $600 billion in total compute spending by 2030. That target is a spending plan extending beyond the proposed financing. The round is being positioned as an “opportunistic” bridge before a possible IPO, according to people familiar with it.
OpenAI targets 30 October signatures
The timetable concerns investor signatures, rather than an announced closing amount. OpenAI gave investors the target on 22 October, while the people familiar with the deal said the round’s final size remained under consideration. AI Affairs had earlier reported an accelerated $30 billion fundraising push ahead of Anthropic’s expected IPO.
Accounts of when the talks began differ. Investors approached OpenAI in December before discussions started, PYMNTS reported. CNBC reported that investors approached OpenAI with proposals in September.
OpenAI confidentially filed a prospectus with the Securities and Exchange Commission in June. The proposed funding round would therefore come as the company also prepares for a potential sale of shares to public-market investors. The reported pre-money valuation is $1.25 trillion, but the round’s size and terms could still change, Tech Insider reported.
Anthropic’s $65 billion round provides a comparison
OpenAI chief financial officer Sarah Friar told employees in August that the company “will be a public company in 2027”. Chief executive Sam Altman said the following month that “right now would be an ill-advised moment to go public.” Both statements preceded the proposed bridge financing.
Anthropic, OpenAI’s rival, also confidentially filed a prospectus with regulators in June and has been meeting prospective investors. It is reportedly seeking a valuation of between $1.5 trillion and $2 trillion in its offering. Those are proposed public-market figures, rather than the price of a completed offering.
For a completed private financing comparison, Anthropic closed a $65 billion funding round in May at a $965 billion valuation. Its completed raise was larger than the maximum OpenAI is now seeking, while the valuation attached to OpenAI’s proposed round is higher than the price reported for Anthropic’s May financing.
