OpenAI lowers valuation target, to raise up to $30 billion

OpenAI is pursuing a funding round of up to $30 billion but has lowered its valuation target to $1.25 trillion. According to internal documents obtained by the Financial Times, the company initially pitched investors a valuation of $1.4 trillion, and CNBC also reported the reduction; the FT says demand for this round is weaker than in previous rounds, with some investors experiencing "indigestion" after large earlier commitments. The round is led by Emirati investors and the investment firm Coatue, and the funding is positioned as bridge financing ahead of a potential IPO; OpenAI is also negotiating a commercial agreement to obtain additional compute capacity through the UAE. OpenAI confidentially submitted an IPO prospectus to the SEC in June, CFO Sarah Friar told employees in August that the company would become publicly listed by 2027, and CEO Sam Altman said in September that current market timing for a listing is unfavorable. Competitor Anthropic is also preparing an IPO, targeting a valuation of $1.5 trillion to $2 trillion.