A week ago, OpenAI was reportedly lining up $30 billion at a $1.25 trillion valuation, which would make it the most valuable private company ever. It turns out the money is harder to find than expected. According to the Wall Street Journal, OpenAI had raised less than half of that target by the time its round was supposed to come together, and the Financial Times reports the goal has now been cut to about $20 billion.
The valuation has slipped a bit, too. OpenAI first pitched investors at $1.4 trillion before settling on $1.25 trillion the week before. Friday, October 30, was the deadline for investors to commit, and the first close is expected to land below $20 billion. Wealthy individuals will get a chance to buy in later through a retail offering at that same valuation.
So who is still in? UAE investors, including the state-backed fund MGX, are expected to be the biggest backers, and OpenAI would get the option to lease new computing capacity in the region in return. Founders Fund, Coatue, Sequoia and Andreessen Horowitz also plan to invest.
The timing explains a lot. AI stocks have been getting hammered all week. Alphabet fell 12% on Thursday after its results, Intel crashed on Friday, and the Nasdaq is now almost 8% below its October 6 record. When public AI stocks wobble, the people writing giant private checks get nervous too.
There's also a race going on. OpenAI is planning to go public in 2027, and Reuters says it wants this round wrapped up before Anthropic lists, since both companies are chasing many of the same investors. Anthropic made its IPO filing public on Monday.
Is this a sign the AI money boom is cooling off, or just a speed bump for a company that still raises more in a week than most startups see in a lifetime?