OpenAI has lowered the valuation target for its funding round of up to $30 billion to $1.25 trillion, down from $1.4 trillion, after resistance from some investors, according to reports in the Financial Times, Bloomberg, and CNBC.
The $150 billion reduction followed a process in which Morgan Stanley and Dragoneer offered OpenAI to private wealth clients at the higher valuation, with demand reported to be weaker than in earlier rounds. Some investors had already invested heavily in prior raises, the Financial Times reported.
Even at the lower figure, the round would value OpenAI at almost 50 percent more than the $852 billion valuation set in March after a $122 billion round. CNBC reported that the $1.25 trillion figure excludes the new capital being raised. Prospective investors have until October 30 to commit, and the company may raise less than $30 billion depending on interest.
Coatue Management and funds from the United Arab Emirates are reported to be in discussions to lead the round. Reuters reported that OpenAI is pitching investors on $50 billion in annualized revenue, rising to an expected $70 billion by year-end.
The timing matters. Anthropic is expected to list in mid-November, with a reported valuation target of between $1.5 trillion and $2 trillion, and OpenAI is working to lock in commitments before that debut. The contest between the two labs now extends from models to capital markets, with ChatGPT and Claude at the center of both stories.
Source: Wealth Professional
