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OpenAI in Talks for $30B Pre-IPO Funding Round
Confirmed
In Short: OpenAI is reportedly in discussions to raise at least $30 billion in a pre-IPO funding round, aiming for a $1.4 trillion valuation.
OpenAI is reportedly in talks with investors to raise at least $30 billion in a pre-IPO funding round, targeting a valuation of roughly $1.4 trillion, according to Bloomberg and TechCrunch.
This new round of funding, if successful, would serve as a bridge round to the IPO, which was previously expected to take place this year but has been delayed.
OpenAI's previous funding round in March raised $122 billion at an $852 billion valuation, making it one of the largest private-company funding rounds ever.
OpenAI's rapid business expansion and the increasing costs of competing in the AI race are driving the need for this new round of funding.
The proposed financing would come only months after OpenAI raised $110 billion at a $730 billion pre-money valuation in February.
OpenAI's CFO, Sarah Friar, had previously raised concerns about the company's readiness to meet public-market regulatory requirements on Altman's preferred IPO timeline.
The new funding round, if completed, would value OpenAI at nearly twice the level of its February round, surpassing Anthropic's recent private market valuation.
OpenAI's latest model, GPT-6.1 Astra, was withheld from release after failing to clear the company's internal safety bar, highlighting ongoing concerns over AI safety.
OpenAI's push to turn its models into autonomous workers, rather than just tools that answer questions, is also contributing to its rapid growth.
This early-stage private financing serves as a bridge round, providing vital capital while CEO Sam Altman prioritizes AI safety over a near-term IPO.
The new round of funding would offer another way for OpenAI to raise the enormous amounts of capital required for its expansion without relying on the public markets.
OpenAI did not respond to TechCrunch's request for comment.
What this adds
The new round of funding, if completed, would represent a significant step up from OpenAI's most recent fundraise.
OpenAI's latest model, GPT-6.1 Astra, was withheld from release after failing to clear the company's internal safety bar, highlighting ongoing concerns over AI safety.
OpenAI's CFO, Sarah Friar, had previously raised concerns about the company's readiness to meet public-market regulatory requirements on Altman's preferred IPO timeline.
What's confirmed
- The new fundraising, if it transpires, will serve as a bridge round to the IPO.
- The company previously raised $122 billion in March at an $852 billion valuation.
What's still developing
- While Anthropic momentarily outpaced OpenAI at the start of the year, recent strategic refocus on key areas like coding has fueled a 70% jump in run-rate revenue since July, reaching $40 billion in August, according to the report.
- If finalized, OpenAI could once again surpass the recent private market valuation of its rival Anthropic, the people said.
- The people said the financing discussions are still in early stages and final terms could still change, adding that demand for this round is driven by investors.
- OpenAI Chief Executive Sam Altman previously stated that the company will not go public this year, choosing instead to focus on addressing artificial intelligence safety issues and calling an IPO at this time \"unwise.\" This funding is seen as a bridge round replacing an IPO, providing OpenAI with additional capital.
- The latest target comes as OpenAI's business is expanding rapidly, but also as the cost of competing at the frontier of AI continues to rise.
- Reuters reported Tuesday that OpenAI's annualized recurring revenue is approaching $70 billion, with enterprise sales more than doubling since July.
- Related articles: Anthropic considers new model to counter OpenAI’s latest AI push OpenAI brings ChatGPT advertising business to Israel OpenAI acquires Israeli-founded camera startup Glass Imaging for over $300 million OpenAI said Dots can operate on their own cloud computers and allow customers to establish rules governing what they can do and when they must seek permission.
- OpenAI has been preparing for an eventual IPO, but CEO Sam Altman said earlier this month that OpenAI would not go public in 2026, citing concerns about AI safety and saying the company had no pressure to do so.
- CEO Sam Altman has said the company is stepping back from a public offering this year, describing the timing as "ill-advised" given OpenAI's ongoing work on AI safety.
- Investors are driving interest in the round, one person said, pointing to the company's robust revenue momentum.
- The outlet also reported that OpenAI has trimmed some of the usage allowances available to subscribers on its $200 plan.
- The company closed a $122 billion round in March at a post-money valuation of $852 billion — at the time the largest in Silicon Valley history — anchored by SoftBank, Amazon $AMZN, and Nvidia $NVDA.