OpenAI Closes $11 Billion First Tranche of Funding Round at $1.25 Trillion Valuation

The money had reached OpenAI's accounts as of Friday, according to people familiar with the matter who spoke to Bloomberg on condition of anonymity because the information is not public. The rest of the round, which could take the total to as much as $20 billion, is expected to be completed in the coming weeks, one of those people said.

The close gives OpenAI new cash at a difficult moment for AI companies. Technology stocks sold off sharply this week, and voters in Tuesday's US midterm elections turned against data centre projects in many local ballots. OpenAI's chief financial officer, Sarah Friar, told CNBC on Friday that the company would press ahead with its data centre expansion despite the results. OpenAI told investors in February that it aimed to spend about $600 billion on computing by 2030, according to Tech Funding News.

The round has shrunk since it was first discussed. Bloomberg reported on September 29 that OpenAI was raising money at a $1.4 trillion valuation. The Financial Times later reported that the company had cut its target to as much as $20 billion from an earlier goal of $30 billion. It also reported that investors had until October 30 to commit and that some had reduced their allocations. The Wall Street Journal reported that commitments stood at about $11 billion, the same amount now said to have been received.

The $1.25 trillion figure is $150 billion, or about 10.7%, below the September valuation. It is still about 47% above the $852 billion at which OpenAI raised $122 billion in a round that closed on March 31. Reports have described the new valuation in different ways: CNBC called it a pre-money figure in an October 22 report and a post-money figure in a later report that cited the Financial Times. With up to $20 billion of new money involved, the difference between the two is significant.

The Gulf is central to the deal. CNBC reported that UAE investors and Coatue were leading the round, and that a group including the Abu Dhabi state-backed investor MGX was expected to be the largest participant. Founders Fund, Sequoia Capital and Andreessen Horowitz were also expected to take part. Several of these firms are also investors in Anthropic, OpenAI's main rival: Coatue, MGX and Founders Fund led or co-led Anthropic's $30 billion Series G in February.

Anthropic's planned stock market listing gives investors a public benchmark for OpenAI's private price. Anthropic filed its prospectus on October 26 for a Nasdaq listing under the ticker ANT. After this week's sell-off, some prospective investors in that offering are now discussing a valuation of $1.2 trillion to $1.3 trillion, Bloomberg reported on Friday, down from the $1.4 trillion to $1.5 trillion discussed earlier. That puts the two companies at roughly the same level.

OpenAI's annualised revenue was about $50 billion at the end of September, according to Bloomberg, and is expected to reach at least $70 billion by the end of 2026. At $1.25 trillion, the company is valued at roughly 25 times its September revenue run rate.

OpenAI confidentially filed for an initial public offering on June 8, CNBC has reported, though its prospectus has not been made public. For now, the remaining money in the current round is expected from wealthy individuals and family offices, who could invest later at the same valuation and take the total towards $20 billion, according to Tech Funding News.