OpenAI cuts proposed funding valuation target to $1.25 trillion

Bloomberg reported that OpenAI was targeting a $1.25 trillion valuation during the final stages of negotiations, a $150 billion reduction from the $1.4 trillion discussed earlier.[1] The Financial Times reported that some investors had pushed back on the earlier valuation.[2] The reporting points to a change in the number under discussion, not a completed financing: Bloomberg said the fundraising talks were continuing and that their details could change.[1] OpenAI declined to comment on the funding discussions, TechCrunch reported.[5]

Bloomberg reported that OpenAI was seeking around $30 billion in the round.[1] CNBC reported that the proposed $1.25 trillion valuation was pre-money, meaning it does not include the capital raised in the financing.[3] CNBC also reported that the final size of the round was still being determined.[3] For financial planning, those distinctions matter: the proposed valuation is not a post-money figure, and the reported fundraising target should not be treated as a settled amount. Bloomberg said details of the discussions could change.[1]

CNBC reported that investors from the United Arab Emirates and Coatue were leading the financing.[3] It described the round as being positioned as a bridge ahead of a potential IPO.[3] CNBC also reported that OpenAI told investors on Thursday that it aimed to secure signatures by the end of the following week.[3] That reported timetable is a target rather than confirmation that the round has closed; the final funding size was still being determined, according to CNBC.[3]

CNBC reported that OpenAI began discussions for the round after investors approached it with proposals in September, and that the company was negotiating a commercial deal for more computing capacity from the UAE.[3] It also reported that OpenAI told investors in February it was targeting roughly $600 billion in total compute spending by 2030.[3] CNBC reported that OpenAI confidentially filed its prospectus with the Securities and Exchange Commission in June, and that the company would be public in 2027.[3] CNBC separately reported that going public then would be ill-advised.[3]