OpenAI cuts valuation target by $150 bn to $1.25 tn | Why it has scaled back its funding ambitions ahead of IPO
OpenAI has lowered its valuation target by $150 billion to $1.25 trillion as it nears the final stages of negotiations for a fresh funding round of up to $30 billion, against a backdrop of investor concerns over massive spending on artificial intelligence.
The ChatGPT maker had discussed a valuation of $1.4 trillion during the talks, according to people familiar with the matter cited by Bloomberg. The discussions are ongoing, and the final terms could change, the people said.
The proposed valuation excludes the new capital being raised. OpenAI most recently raised $122 billion in March at an $852 billion valuation.
Coatue Management is in talks to co-lead in the round, according to the people. OpenAI has also been in talks with multiple investment funds from the United Arab Emirates, among other firms, including BlackRock Inc., Bloomberg previously reported.
The company expects to have investor commitments finalised by the end of next week, Bloomberg sources revealed.
The revision comes amid a broader reassessment of AI investments, with technology stocks falling this week after mixed quarterly results from companies including Meta Platforms and Tesla. The results have added to investor scrutiny of the scale of spending on artificial intelligence and the returns it may generate.
OpenAI has pushed back its IPO plans until next year, citing its focus on AI safety efforts. The company confidentially filed its prospectus with the US Securities and Exchange Commission in June but has not disclosed a specific listing date.
Chief financial officer Sarah Friar told employees in August that the company “will be a public company in 2027”. Chief executive Sam Altman said the following month that going public at that point would be “an ill-advised moment”.
Meanwhile, rival Anthropic is preparing for an IPO that is expected next month. It is reportedly seeking a valuation of $1.5 trillion to $2 trillion, after raising $65 billion in May at a $965 billion valuation.
Investors will be watching Anthropic's market reception closely as they assess valuations across the AI sector.
Meanwhile, Chinese AI startup DeepSeek has raised about 100 billion yuan ($14.98 billion) in its latest funding round from investors including chipmaker GigaDevice, food delivery company Meituan and automaker Geely, according to four people with knowledge of the matter.
DeepSeek, which sources have said is valued at 500 billion yuan before new capital is injected, will have doubled its original fundraising target of 50 billion yuan. The rise underscores strong interest from investors - many backed by the state and big corporations - as China aims to stay competitive in the AI race against the US.
(With inputs from Bloomberg and CNBC)
Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player.
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