OpenAI's new funding round has its first close. About $11 billion landed in the company's accounts on November 6, which puts the round's valuation at $1.25 trillion. Bloomberg reported on November 7 that this falls short of the $1.4 trillion OpenAI originally sought, and the full round may end up closing at around $20 billion instead of the at-least-$30 billion initially targeted.
Coatue Management and T. Rowe Price joined the first tranche, according to people familiar with the matter, with the rest expected to follow within weeks. SoftBank Group is on the list too, along with Sequoia Capital, Founders Fund, and Andreessen Horowitz. A consortium of investors from the United Arab Emirates is involved as well. OpenAI is also working with investment banks to raise money from high-net-worth individuals and retail investors.
The round took more than a month to put together. OpenAI had delayed its IPO plan, so it turned to private markets instead, trimming both the size and the target valuation as listed AI stocks sold off sharply. Bloomberg made a blunt observation here — the company that once powered the AI boom with its fundraising is now pulling back, and that says something about sentiment. Investors are increasingly worried about massive AI infrastructure spending. They are also nervous about new obstacles to data-center construction after the US midterm elections.
CFO Sarah Friar, speaking the same day per Phoenix Tech, insisted the midterm results would not affect OpenAI's IPO plans and that data-center investment would continue. Her statement lands next to another data point worth pausing on. Potential investors are discussing valuing rival Anthropic at about $1.2 to 1.3 trillion in its IPO, per Bloomberg's earlier reporting, down from the $1.5 trillion previously on the table.
Even at the reduced price, $1.25 trillion sits well above the $852 billion valuation OpenAI carried when it raised money in March. The money has arrived. The IPO still has no timetable.