Glonce

OpenAI reportedly seeks up to $30B at $1.25T valuation before IPO

businessThe Glonce editorsTechCrunch🔥58Glonce rating58Impact55Novelty35Relevance85Surprise40Players92Credibility60
OpenAI reportedly seeks up to $30B at $1.25T valuation before IPO

OpenAI is reportedly close to securing another mega round of private funding instead of going straight to an IPO. According to sources who spoke to CNBC, and relayed by TechCrunch, the AI lab is working on raising up to $30 billion at a $1.25 trillion pre-money valuation. The round would be led by Coatue and investors in the UAE.

The report follows a similar one from Bloomberg about a month earlier, which said OpenAI was working on raising $30 billion at a $1.4 trillion valuation. Both outlets say terms are still being negotiated, so they could change. CNBC also reports that the UAE funding could be coupled with a deal to secure more computing capacity for OpenAI from the UAE. OpenAI declined comment.

TechCrunch notes that if OpenAI commands a valuation above $1 trillion in this round, it would break records as the most valued private company ever. That would also raise the bar for OpenAI's forthcoming IPO. The company filed confidential IPO paperwork in June, after its last raise in March valued the ChatGPT maker at $852 billion post-money.

The high valuation could also have ramifications for Anthropic's IPO, which many believe is closer to materializing. TechCrunch adds that rumors suggest Anthropic's public S-1 filing could come any day now. The latest reports, per CNBC, have Anthropic seeking a $1.5 to $2 trillion valuation for its public debut. Anthropic raised $65 billion at a $965 billion valuation in May, in what many believed at the time would be its last big round before an IPO. It also filed confidential IPO paperwork in June.

Key facts

  • Sources told CNBC that OpenAI is working on raising up to $30 billion at a $1.25 trillion pre-money valuation, in a round led by Coatue and investors in the UAE.
  • Bloomberg reported about a month earlier that OpenAI was working on a $30 billion raise at a $1.4 trillion valuation; both outlets say terms are still being negotiated.
  • CNBC reports the UAE funding could be coupled with a deal to secure more computing capacity for OpenAI from the UAE. OpenAI declined comment.
  • OpenAI's last raise, in March, valued it at $852 billion post-money, and it filed confidential IPO paperwork in June.
  • Anthropic is reportedly seeking a $1.5 to $2 trillion valuation for its public debut, after raising $65 billion at a $965 billion valuation in May.

Why it matters

A valuation above $1 trillion would, in TechCrunch's words, break records as the most valued private company ever. It would also raise the bar for OpenAI's forthcoming IPO. The round matters for Anthropic too: TechCrunch says a high OpenAI valuation could have ramifications for Anthropic's IPO, which many believe is closer to materializing. The reported figures compare with OpenAI's $852 billion post-money valuation from March and Anthropic's $965 billion valuation from May.

Who it affects

OpenAI and its prospective investors, led by Coatue and UAE investors according to CNBC's sources. Anthropic is affected as the other AI lab heading toward a public listing; it is reportedly seeking $1.5 to $2 trillion for its debut. Anyone watching the timing and pricing of AI IPOs has reason to follow how this round is priced.

How to use it

This is a funding story, not a product, so there is nothing to adopt. The practical use is as a reference point: the reported $30 billion size, the $1.25 trillion pre-money figure and the earlier $1.4 trillion Bloomberg figure show where private-market pricing of the leading labs sits ahead of their listings. Watch for Anthropic's public S-1, which rumors say could come any day.

How solid is it

Moderate to low. The figures come from unnamed sources speaking to CNBC, relayed by TechCrunch, and OpenAI declined comment. Bloomberg's report a month earlier is described as similar, but its figure was $1.4 trillion, and the source does not say whether that was pre- or post-money. Both outlets say terms are still being negotiated. The Anthropic S-1 point is a rumor, and the source does not say Anthropic has filed a public S-1.

Risks and caveats

Terms could change, since negotiations are ongoing. The source gives no closing date, no post-money valuation for the new round, no split between Coatue and the UAE investors, no names of the UAE investors, and no size for the possible computing-capacity deal. It also gives no IPO date or target valuation for OpenAI. The two reported valuations ($1.25 trillion pre-money and $1.4 trillion) are not necessarily comparable, so they should not be read as a drop or a rise without confirmation.