OpenAI has adjusted downward the valuation it is targeting for its upcoming funding round, moving from $1.4tn announced earlier this month to $1.25tn. The shift comes after several backers expressed reservations about the higher figure, according to reporting by the Financial Times based on reviewed documents.

The company stands on the verge of securing approximately $30bn at the revised valuation, excluding the fresh capital being raised, CNBC reported Thursday. Leading the investment effort are backers from the United Arab Emirates alongside Coatue, according to sources familiar with the transaction. TNW has not independently confirmed these amounts.

The reduction represents a $150bn decrease from OpenAI's initial $1.4tn target announced in September. The company's previous major capital raise occurred in March, when it brought in $122bn at an $852bn valuation that included the newly invested funds.

Timeline and negotiating partners

OpenAI communicated to investors on Thursday that it intends to secure signatures by the conclusion of the following week, CNBC reported. The ultimate size of the funding round remains under discussion.

Coatue is in discussions to serve as co-lead investor, Bloomberg reported. Beyond Coatue, OpenAI has engaged with multiple UAE-based investment vehicles, including Abu Dhabi's MGX, as well as BlackRock, according to Bloomberg's reporting.

Alongside the financial investment, OpenAI is pursuing arrangements for expanded computing resources from the UAE, one source told CNBC. The company had previously disclosed to investors in February that it is aiming toward approximately $600bn in cumulative compute expenditure through 2030.

OpenAI declined to provide comment to Bloomberg. Coatue has not yet responded to Bloomberg's inquiry. Sources cautioned that specific terms could still shift before finalization.

Interim step toward public markets

The funding round is being characterized as an "opportunistic" interim measure preceding a potential initial public offering, CNBC reported. OpenAI submitted a confidential filing with the US Securities and Exchange Commission in June but has not announced a listing timeline.

Sarah Friar, the company's chief financial officer, told employees in August that OpenAI "will be a public company in 2027," according to CNBC. However, one month later, chief executive Sam Altman offered a different perspective on the matter.

Right now would be an ill-advised moment to go public

Sam Altman

OpenAI has postponed its IPO timeline to the following year, citing a commitment to prioritizing AI safety measures, Bloomberg reported.

Competitive timing with Anthropic

OpenAI had been working to finalize this funding before Anthropic proceeds with its own public market debut. Market participants anticipate Anthropic's IPO will occur next month, Bloomberg reported. The competitor is pursuing a valuation between $1.5tn and $2tn, Reuters reported. Anthropic had raised $65bn in May at a $965bn valuation.

The funding discussions arrive during a challenging period for artificial intelligence equities. Investor confidence has wavered following earnings announcements from Meta, which has committed to future spending reaching $825bn, and from Tesla, Bloomberg reported.

Source: The Next Web