OpenAI Lowers Valuation Target to $1.25 Trillion While Seeking $30 Billion Pre-IPO Bridge
OpenAI reduced its valuation target from $1.4 trillion to $1.25 trillion as it closes in on a $30 billion funding round led by UAE investors and Coatue.
According to The Decoder, OpenAI is moving forward with a funding round of up to $30 billion but has lowered its valuation target to secure the deal. The company initially pitched investors on a $1.4 trillion valuation, a figure that has since been adjusted to $1.25 trillion. This reduction reflects weaker demand compared to previous rounds, with some backers experiencing "indigestion" after heavy investments in earlier fundraises.
UAE investors and investment firm Coatue are leading the $30 billion round. The funding is being positioned as a bridge ahead of a potential initial public offering (IPO). OpenAI is also negotiating a commercial deal through the UAE to secure additional compute capacity.
OpenAI confidentially filed an IPO prospectus with the U.S. Securities and Exchange Commission (SEC) in June. CFO Sarah Friar told employees in August that OpenAI would be a publicly traded company by 2027. However, CEO Sam Altman stated in September that the timing was unfavorable for going public. Competitor Anthropic is also preparing for an IPO, targeting a valuation between $1.5 and $2 trillion.