OpenAI lowers its valuation target to $1.25T and raises up to $30B, led by UAE investors and Coatue
OpenAI cut its new round's pre-money target to $1.25 trillion (from $1.4T) on Oct 22, raising up to $30B led by Coatue and UAE investors; signatures due Oct 30.
OpenAI has told prospective investors that its new funding round will proceed at a $1.25 trillion pre-money valuation, raising up to $30 billion, according to CNBC’s October 22 report. Asset manager Coatue and investors from the UAE are leading the round, and OpenAI wants signatures in hand by the end of next week. A month earlier, banks were pitching the same round at $1.4 trillion. The cut is modest in percentage terms, but it is the first time this round has moved on price, and it shows even the priciest private AI asset is now being haggled over.
Key points
- The price moved. Bloomberg reported a $1.4 trillion valuation on September 29; per internal documents obtained by the Financial Times, October’s terms sit at $1.25 trillion pre-money.
- The deadline is close. CNBC reports OpenAI told investors on October 22 it aims to secure signatures by the end of the following week; Chinese outlet Wallstreetcn puts the subscription deadline at October 30.
- The money is tied to compute. OpenAI told investors in February that it targets roughly $600 billion in total compute spending by 2030 (CNBC); this $30 billion round is one of the pipes feeding that bill.
Background
The round has been in motion for a month, and the terms have shifted along the way. Bloomberg’s September 29 report put it at a $1.4 trillion valuation with $30 billion sought. Per a PYMNTS piece of October 20 relaying Reuters’ October 19 report, talks were accelerating, with SoftBank and Abu Dhabi’s MGX in talks to join and a goal of locking money in before Anthropic’s listing. In the October 22 terms, the leads are Coatue and UAE investors; whether SoftBank or MGX remains involved, no source says. Note the timing: SoftBank’s separate $30 billion commitment to the previous round finished landing on October 1, as we covered at the time — that was the last round closing, not this one opening.
The March round is the benchmark the new price has to clear: per TechCrunch, it totaled $122 billion at an $852 billion post-money valuation. A $1.25 trillion pre-money still implies roughly 47% upside from there, which would keep OpenAI the most valuable private company in the world. But the revenue story weakened over the same period: the Financial Times reported on October 8 that OpenAI told investors its annualized revenue was “close to $50 billion” in September — about $20 billion below the ~$70 billion figure widely quoted a week earlier (our write-up here). A valuation climbing while the revenue number gets marked down: the two lines met this month.
The IPO clock is the third strand of background. OpenAI confidentially filed its prospectus with the SEC in June. CFO Sarah Friar told employees in August that the company “will be a public company in 2027.” Sam Altman said in September that “right now would be an ill-advised moment to go public.” CNBC describes the current raise as an “opportunistic” bridge ahead of a potential IPO.
The facts
Every number below traces to unnamed people familiar with the deal. OpenAI declined to comment (per TechCrunch), and the confidential SEC filing cannot be inspected directly.
| Term | Figure | Source |
|---|---|---|
| Pre-money valuation target | $1.25 trillion | CNBC, Oct 22 |
| September pitch valuation | $1.4 trillion | Bloomberg, Sept 29; FT internal documents |
| Raise size | Up to $30 billion; final size undetermined | CNBC |
| Lead investors | Coatue and UAE investors | CNBC |
| Signing deadline | End of next week; subscription decisions due Oct 30 | CNBC; Wallstreetcn |
| March round, post-money | $852 billion | TechCrunch |
| Total compute spend target | ~$600 billion by 2030 | CNBC (told to investors in February) |
Three caveats on the numbers. First, CNBC’s report itself gives only the current $1.25 trillion figure; the “lowered” framing comes from the FT’s internal documents and Bloomberg’s earlier reporting, and that is the arc this article follows. Second, the lead investors are described inconsistently: CNBC says only “UAE investors” without naming funds, Wallstreetcn writes “UAE sovereign funds,” and The Decoder writes “UAE investors and Coatue” — this article sticks with CNBC’s original wording. Third, the tie-in: OpenAI is negotiating a commercial deal for preferential access to new UAE computing capacity (CNBC), but the exact relationship between the lead investment and that compute agreement has not been disclosed.
The comparison case is Anthropic. Per CNBC, its IPO is reportedly targeting a $1.5 to $2 trillion valuation; it closed a $65 billion round in May at a $965 billion post-money valuation and also confidentially filed in June. One lab’s private price is being cut while the other’s public-market ask goes up.
What others say
The demand side is where this round’s reporting gets interesting. Wallstreetcn quotes one person familiar with the matter: “There is no scramble at all. Every previous OpenAI round was a feeding frenzy; this time the response is flat.” The report adds that some institutions show “indigestion” after participating in so many consecutive rounds — The Decoder, relaying the Financial Times, uses the same word.
The banks’ pitch is documented too. Per the FT’s internal documents (relayed by Wallstreetcn; the FT original sits behind a paywall we could not read), Morgan Stanley and Dragoneer had pitched the round to Morgan Stanley’s private-wealth clients at a $1.4 trillion pre-money valuation. Wallstreetcn’s narrative places that pitch among the terms “floated to the market earlier this month”; no source gives an exact date for it.
On the valuation gap itself, Wallstreetcn quotes Jimmy Chang, CIO of the Rockefeller family office, who holds positions in both OpenAI and Anthropic: “The market needs to see one successful IPO.” Wallstreetcn also reports that some investors would rather wait for Anthropic to list and establish a public-market pricing anchor before deciding on OpenAI.
Our take
The number that matters to developers is what the round funds, more than the valuation itself. OpenAI’s target of roughly $600 billion in total compute spending by 2030 depends on raising continuously, and whether this $30 billion signs smoothly feeds directly into data-center buildouts, model capacity, and the pricing tiers built on top of that capacity. The drop from $1.4 trillion to $1.25 trillion is about 11% — small, but it is the first round of this scale in the cycle to get marked down mid-negotiation, and the buyers are haggling in the most literal way possible: by threatening to wait for the competitor’s IPO before buying.
The honest caveat, as always with private-market stories: every key figure here comes from unnamed sources, terms are still negotiable and may change, and no source says whether SoftBank or MGX is in this round — we won’t declare them out. Two checkpoints follow: the October 30 signing deadline, and Anthropic’s S-1, which could surface any day. Its numbers leaked once already (we covered the filing leak), and the public version will let the open market answer the question this round keeps dodging: what is an AI asset actually worth?