OpenAI trims round goal to $20B after $11B first close

OpenAI took in roughly $11 billion on November 6 in the first close of its new funding round, at a $1.25 trillion valuation, Bloomberg reported, citing people familiar with the matter. If you’re squaring that with the $30 billion at $1.4 trillion OpenAI first asked for, only the $11 billion is reported as money transferred, and the total of up to $20 billion it now aims for is still a target. If you’re setting $1.25 trillion against March’s $852 billion, the two may not be on the same basis: in October the Financial Times described the new figure as a pre-money valuation, counted before the new cash arrives, while the March mark is post-money, after $122 billion came in.

The new valuation sits $150 billion below the earlier target, Epyhia wrote, summing up Friday’s reports. The Wall Street Journal and the Financial Times said OpenAI will try to raise the rest in the coming weeks from family offices and high-net-worth individuals, after a “tepid” response from some large institutional investors.

Who is writing the checks

A consortium of UAE investors that includes the state-backed fund MGX is expected to be the largest participant. As part of the deal, the FT said, OpenAI would get the option to lease newly built computing capacity in the region. Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz are also expected to take part, along with existing backers SoftBank and MGX.

OpenAI closed its previous round on March 31 with $122 billion of committed capital at that $852 billion post-money valuation. Its anchor commitments, revealed in February, came from strategic investors, CNBC reported: Amazon agreed to invest up to $50 billion, and Nvidia and SoftBank put in $30 billion each.

Pressure on Anthropic’s price

The first close came on a day the Nasdaq Composite fell 2.9%, Reuters reported, leaving the index 7.8% below its October 6 high after disappointing earnings from Google, Amazon and Intel.

Anthropic, which confidentially filed its prospectus in June and has been meeting prospective investors, has been seeking a valuation between $1.5 trillion and $2 trillion. Some existing and prospective Anthropic investors have argued for closer to $1.5 trillion after third-quarter results fell short of expectations, Reuters said.

By the Wall Street Journal’s count, Anthropic more than doubled revenue from the first quarter to the second, reaching $11.6 billion, while OpenAI’s sales grew roughly 18% to $6.7 billion over the same period. Anthropic made a small operating profit in the second quarter, and OpenAI’s operating losses deepened. But the two companies count revenue differently. OpenAI reports net of partners’ shares and accuses Anthropic of booking some contracts resold through cloud providers at gross value; Anthropic says it follows established accounting practices. Third-party data shows OpenAI recently won back some market share after cutting prices on its latest models.

The compute bill and the IPO

Investors familiar with OpenAI told Reuters the company needs the money for large infrastructure commitments, and to strengthen its balance sheet in case weak IPO markets push back a 2027 listing. CNBC reported that OpenAI is negotiating a commercial deal for more UAE compute capacity, and that in February it told investors it is targeting roughly $600 billion in total compute spending by 2030. Commentary around the Journal’s story pointed out that $11 billion is a fraction of the compute bills frontier labs talk about publicly.

OpenAI confidentially filed a prospectus with the SEC in June and had spent more than a month in talks on this round after putting its IPO plans on hold. The Wall Street Journal says a debut could come as soon as early next year, while Reuters and CNBC have reported a 2027 target.

CFO Sarah Friar told employees in August that the lab “will be a public company in 2027,” CNBC reported. A month later, CEO Sam Altman said that “right now would be an ill-advised moment to go public.”

Reuters reported in mid-October that OpenAI sped up its fundraising ahead of Anthropic’s expected debut, because the two labs draw on a similar pool of investors. Some investors saw the push as an attempt to lock up money that might otherwise go into Anthropic’s offering. The Wall Street Journal reported on November 2 that Anthropic’s listing is expected next month.