OpenAI Cuts Funding-Round Valuation Target to $1.25 Trillion From $1.4 Trillion

OpenAI has lowered the valuation it is seeking in its next private funding round to $1.25 trillion before new money, down $150 billion from the $1.4 trillion it pitched earlier in October, according to Bloomberg and CNBC reports citing people familiar with the talks. The round of up to $30 billion is being led by Coatue and investors from the United Arab Emirates, and OpenAI expects commitments to be finalized by the end of next week. Terms could still change, and the company declined to comment.

Even at the lower price, OpenAI would be the most valuable private company ever, well above the $852 billion post-money valuation of its $122 billion round in March. The cut followed resistance from some investors during a week when Meta and Tesla results revived worries about AI spending, and OpenAI has pushed its IPO plans into next year. CNBC also reported that the UAE money could be paired with a deal for more computing capacity.

The read-through matters for public markets. MSFT, OpenAI's largest listed backer, fell 2.2% to $521.08 on Thursday, but the Nasdaq Composite dropped 2.6% the same day, so the move tracked the broader AI selloff more than OpenAI specifically. Microsoft's bigger exposure is commercial: OpenAI agreed to buy an additional $250 billion of Azure cloud services, and Microsoft's rights to OpenAI's models run through 2032.

Next up: whether OpenAI signs at $1.25 trillion, how Anthropic's IPO is received (it is expected next month, with the company reportedly seeking $1.5 trillion to $2 trillion), and Microsoft's fiscal first-quarter report on October 28.