OpenAI’s valuation target slips from $1.4T to $1.25T

OpenAI is now asking investors for a $1.25 trillion pre-money valuation in a round of up to $30 billion, the Financial Times reported on October 22. That is lower than the price it pitched first. Investors from the United Arab Emirates are part of the round, and the talks are in their final stages.

The earlier ask was around $1.4 trillion, per Bloomberg. That figure also left out the money being raised, so the two numbers measure the same thing, and the gap between them is about $150 billion. Before that, The Wall Street Journal had reported early talks at more than $1.2 trillion, which puts the new target close to where the discussion started.

Even after the cut, TechCrunch reported, a $1.25 trillion valuation would make OpenAI the most highly valued private company ever. The last mark was set on March 31, when OpenAI closed a $122 billion round anchored by Amazon, Nvidia and SoftBank at an $852 billion post-money valuation. Not all of that March money is unconditional: $35 billion of Amazon’s commitment of up to $50 billion depends on OpenAI going public or reaching artificial general intelligence.

When the March round closed, CNBC reported that OpenAI said it was generating $2 billion in revenue a month and had made $13.1 billion the previous year, while still burning cash and not yet profitable. The company had also been backing away from some hefty spending plans and shutting down products, including its Sora video app, to rein in costs.

The new round is close to finalizing but has not closed.