OpenAI has cut its valuation target to $1.25 trillion, down from the $1.4 trillion it pitched to investors earlier this month, according to sources cited by the Financial Times and CNBC. The ChatGPT maker is in the final stretch of a private funding round worth up to $30 billion, led by investment firm Coatue and investors from the UAE.
The reduction is a notable moment for the AI giant: it shows that even the most-watched company in tech must adjust its price when investors push back. It also sets the stage for what could be the largest IPO in history, with OpenAI having filed confidential paperwork in June.
OpenAI $30B raise: lower valuation, weaker demand
According to the Financial Times, internal documents show OpenAI originally pitched a $1.4 trillion valuation. Demand came in weaker than in previous rounds, with some backers reportedly feeling "indigestion" after heavy investments in earlier fundraises. The target was then lowered to $1.25 trillion, a figure CNBC also confirmed.
The round is framed as a bridge ahead of a potential stock market listing rather than a replacement for an IPO. OpenAI is also negotiating a commercial deal to secure additional computing capacity through the UAE, according to CNBC. Terms are still being discussed and could change.
Why the $1.25 trillion number matters
Should OpenAI close the round above $1 trillion, it would become the most valuable private company ever. That record would also raise expectations for its IPO. For context, the company was valued at $852 billion after its round in March.
The timing of the listing remains unsettled. CFO Sarah Friar told employees in August that OpenAI would be a publicly traded company by 2027, while CEO Sam Altman said in September that market conditions were unfavorable for going public. Competitor Anthropic is also preparing its own IPO, targeting a valuation between $1.5 trillion and $2 trillion, according to CNBC.
