OpenAI Targets $30 Billion and Lowers Valuation Ahead of IPO

OpenAI is preparing a funding round that could reach $30 billion, seen as a step towards an initial public offering (IPO). The proposed valuation has been lowered from $1.4 trillion to $1.25 trillion. Meanwhile, the company has filed an IPO prospectus, internally setting a target for 2027, while Sam Altman publicly believes the timing is not favorable. Anthropic is also preparing for an IPO and aims for a higher valuation.

IPO: Confidential Filing, 2027 Horizon, and Diverging Messages

OpenAI confidentially filed an IPO prospectus with the SEC in June. In August, CFO Sarah Friar informed employees that OpenAI would become a publicly traded company by 2027. In September, CEO Sam Altman stated that the timing was not right for going public, a message he had already conveyed internally in June. Meanwhile, Anthropic is also preparing for an IPO and is targeting a valuation between $1.5 trillion and $2 trillion.

Investors and Computing Power: Role of the UAE and Coatue, Agreement Under Discussion

The funding round, which could amount to $30 billion, is led by investors from the United Arab Emirates as well as the investment firm Coatue. OpenAI is also discussing a commercial agreement to enhance its computing capacity through the UAE. This funding is presented as a preliminary step towards a potential IPO.

Financial Terms: Reduced Target and Lower Investor Appetite

OpenAI is on the verge of finalizing a funding round that could reach $30 billion. The company initially proposed a valuation of $1.4 trillion, according to internal documents, before lowering it to $1.25 trillion. The Financial Times reports that investor demand was weaker than in previous rounds, with some experiencing "indigestion" after significant commitments in earlier fundraising efforts.