OpenAI Secures $11 Billion at $1.25 Trillion Valuation, Well Short of Original Target

OpenAI has received roughly $11 billion in commitments for the first close of its latest funding round, valuing the company at $1.25 trillion, according to multiple reports Friday. The amount is less than half the $30 billion the company initially sought at a $1.4 trillion valuation, and the valuation itself represents a $150 billion reduction from that earlier target.

Bloomberg reported the funds were transferred Friday, citing people familiar with the matter. The Wall Street Journal and Financial Times said OpenAI now aims to raise up to $20 billion total in the coming weeks, turning to family offices and high-net-worth individuals after a "tepid" response from some large institutional investors.

Scaled-back ambitions

The revised terms mark a sharp reset for the company that kicked off the current AI investment cycle. Reuters reported that in March, OpenAI raised $122 billion at an $852 billion valuation, a round that included a large commitment from Amazon. The jump toward a trillion-dollar-plus valuation in the same year was always likely to face scrutiny once public AI-linked stocks began selling off. Reuters reported that the Nasdaq Composite fell 2.9% on Friday alone and was down 7.8% from its October 6 high, following disappointing earnings from Google, Amazon and Intel.

OpenAI had been in discussions for more than a month after postponing plans for an initial public offering. The company confidentially filed a prospectus with the SEC in June, but the timeline for a listing remains fluid. The Wall Street Journal reported a debut could come as early as early next year; Reuters and CNBC have reported a 2027 target. CNBC reported that CFO Sarah Friar told employees in August the lab "will be a public company in 2027," while CEO Sam Altman said the following month that "right now would be an ill-advised moment to go public."

UAE anchor, compute ties

A consortium of UAE investors including state-backed fund MGX is expected to be the largest participant. The Financial Times reported that as part of the deal, OpenAI would gain the option to lease newly developed computing capacity in the region. CNBC separately reported OpenAI was negotiating a commercial deal for more UAE compute capacity and had told investors in February it targets roughly $600 billion in total compute spend by 2030. Venture firms including Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz are also expected to participate, along with existing backers SoftBank and MGX.

Anthropic's shadow

Timing against rival Anthropic has shaped the scramble. Reuters reported in mid-October that OpenAI accelerated fundraising ahead of Anthropic's expected public debut because both labs tap a similar investor base. The Wall Street Journal reported on November 2 that Anthropic's public listing is expected next month. Some investors viewed OpenAI's push as an effort to lock capital that might otherwise go into Anthropic's offering. Anthropic confidentially filed its prospectus in June and has been meeting prospective investors, seeking a valuation between $1.5 trillion and $2 trillion. Reuters reported some existing and prospective Anthropic investors have argued for closer to $1.5 trillion after third-quarter results fell short of expectations.

Revenue comparisons have become part of the narrative. The Wall Street Journal reported Anthropic more than doubled revenue to $11.6 billion from the first to the second quarter, while OpenAI grew sales by roughly 18% over the same period to $6.7 billion. Anthropic achieved a small operating profit in Q2; OpenAI's operating losses deepened. However, the two companies count revenue differently — OpenAI net of partners' shares, with OpenAI accusing Anthropic of booking some cloud-resold contracts at gross value, and Anthropic saying it follows established accounting practices. Third-party data shows OpenAI recently regained some market share after cutting prices on its latest models.

Capital needs unchanged

Investors familiar with OpenAI have told Reuters the company needs money for substantial infrastructure commitments and to bolster its balance sheet if weak IPO markets delay a 2027 listing. Commentary around the Wall Street Journal story noted that $11 billion is a fraction of the compute bill frontier labs discuss publicly. Missing the original $30 billion ask does not cancel the spend plan; it forces a smaller private check, a lower mark, and more work to bring in family offices and a possible second tranche.

OpenAI is racing to fund compute and stay ahead of a rival heading to public markets, and the message from investors is clearer pricing pressure — not a closed door, but a much smaller first check than the company put on the table.