OpenAI Raises About $11B of $30B Target at $1.25T Valuation

The latest:

OpenAI has fallen well short of the $30 billion it initially sought in its latest funding round, The Wall Street Journal reported on 31 October, with the round valuing the company at $1.25 trillion against a $1.4 trillion target. Techmeme, summarizing a WSJ report by Berber Jin, said about $11 billion in commitments has been secured and that OpenAI expects to raise more in coming weeks.

Details:

• The headline figure: The WSJ’s technology desk posted on X at 02:00 UTC on 31 October that OpenAI has raised less than half of the $30 billion it had initially targeted. The newspaper separately posted its standfirst at 01:58 UTC, giving the $1.25 trillion valuation against the $1.4 trillion target.
• The commitment number: Techmeme, summarizing the WSJ report by Berber Jin, said OpenAI has secured about $11 billion in commitments and expects more in coming weeks. That is roughly 37% of the original $30 billion target and about 55% of the roughly $20 billion the Financial Times says the company is now seeking.
• The FT revision: The Financial Times reported, two hours before the WSJ, that OpenAI is now seeking about $20 billion at a $1.25 trillion valuation as it tempers its ambitions. The two figures measure different things: the FT number is a target, the WSJ number is money actually raised.
• The valuation cut: The Kobeissi Letter, citing the FT, posted on X that OpenAI cut its funding target by $10 billion and its valuation by $150 billion, from $1.4 trillion to $1.25 trillion. It also claimed the company set a same-day deadline for investors to commit.
• The original terms: CNBC reported on 22 October that OpenAI was raising up to $30 billion at a $1.25 trillion valuation, citing people familiar with the deal. CNBC said investors from the United Arab Emirates were leading the round alongside Coatue, and that the final size was still being determined.
• The compute context: CNBC reported that OpenAI told investors in February it is targeting roughly $600 billion in total compute spend by 2030. Measured against that plan, the under $15 billion implied by the WSJ headline amounts to less than 3% of the stated spending ambition.
• The initial close: Wall St Engine, summarizing the FT report on X, said the initial close is expected to fall short of $20 billion, with a later offering potentially filling the gap. The readable WSJ text does not name the investors in the round or state whether it has closed.
• The wider market: The report follows a week in which Blackstone told investors Anthropic may be rated BB after its IPO, S&P turned Meta’s outlook negative, and Big Tech returned just 9.3% of its cash to shareholders. No statement from OpenAI on either report has been issued.

Background:

CNBC first described the pre-IPO round on 22 October as up to $30 billion at a $1.25 trillion valuation, led by UAE investors alongside Coatue. Within nine days, the target had been cut to about $20 billion per the FT, and the WSJ reported the raise landing below half the original number.

Between the lines:

The two newspapers are not in conflict: the FT reports a lowered target, the WSJ reports money actually in. Read together, they describe a round where the ask was cut by $10 billion and the take is still short of the reduced figure. Against the roughly $600 billion compute plan CNBC reported, about $11 billion funds a small fraction of what OpenAI has told investors it intends to spend.

What’s next

Watch whether the coming weeks bring the additional commitments the WSJ says OpenAI expects, whether a later offering closes the gap to $20 billion, and whether the company or its named lead investors address the revised terms.