OpenAI Slashes Valuation Target to $1.25 Trillion as It Chases $30 Billion Before IPO

OpenAI is closing in on a funding round that could raise as much as $30 billion and value the ChatGPT creator at $1.25 trillion, but the deal comes with a potential warning sign: investors reportedly showed less enthusiasm for the company’s higher valuation target.

The artificial intelligence giant is negotiating with investors, including funds from the United Arab Emirates and US investment firm Coatue, to secure fresh capital ahead of a potential stock market debut in 2027. However, the company has reportedly lowered its valuation expectations after encountering resistance to an earlier $1.4 trillion target.

The proposed financing could become a crucial bridge for OpenAI as it prepares for an initial public offering (IPO) while facing enormous computing expenses, intensifying competition and growing scrutiny of the money pouring into artificial intelligence.

OpenAI Cuts Its $1.4 Trillion Valuation Target

According to reports citing people familiar with the negotiations, OpenAI initially explored raising money at a valuation of approximately $1.4 trillion. The company is now targeting a valuation of $1.25 trillion, excluding the new capital raised.

Although the revised figure remains extraordinary, it represents a significant adjustment from the earlier target. The company was reportedly valued at approximately $852 billion before the proposed financing, meaning the new valuation would represent an increase of nearly 50%.

The shift also comes amid concerns about the sustainability of the AI infrastructure boom and a pullback in US technology stocks. Some investors have reportedly become more cautious after committing substantial sums to previous funding rounds.

OpenAI has raised enormous amounts of capital in recent years, including a reported $40 billion round in March 2025 and a record-breaking $122 billion financing round in March 2026. The latest fundraising effort suggests the company still needs substantial financial backing as it expands its AI operations.

However, the final size of the new round remains uncertain. Reports indicate that OpenAI could raise less than $30 billion if investor demand falls short of expectations.

UAE Investors and Coatue Lead Funding Talks

Funds from the United Arab Emirates and US investment group Coatue are reportedly discussing leading the proposed financing.

The UAE’s involvement could extend beyond a conventional investment. According to reports, OpenAI is negotiating a commercial arrangement that would provide access to additional computing capacity developed by its partners in the Gulf nation.

The proposed deal could also give OpenAI a right of first refusal on new computing power developed by those partners. Such an arrangement would be strategically important as the company competes to secure the infrastructure required to train and operate increasingly sophisticated AI models.

Computing resources are among the biggest expenses facing advanced AI developers. Powerful processors, energy, data centers and networking infrastructure require substantial long-term investment.

OpenAI has previously told investors that it expects its cumulative computing expenditure to reach approximately $600 billion by 2030. Securing additional funding and reliable access to computing capacity could therefore become central to its expansion strategy.

The company has reportedly asked prospective investors to commit by October 30, although the final terms remain subject to negotiations.

OpenAI IPO Could Arrive in 2027

The proposed funding round is being positioned as an interim financing step before OpenAI potentially enters the public markets.

Chief Financial Officer Sarah Friar reportedly told employees in August that the company would become a public company in 2027. Chief Executive Sam Altman subsequently cautioned that the timing was not yet right, highlighting the uncertainty surrounding its eventual listing.

OpenAI has reportedly filed confidential IPO paperwork with US regulators, but it has not announced a definitive date for its stock market debut.

Going public would give the company access to a much broader pool of capital. However, it would also expose OpenAI to greater scrutiny over its finances, spending commitments, growth prospects and path towards profitability.

Anthropic’s IPO Could Change the AI Funding Race

OpenAI is not the only AI company preparing for a potentially historic public offering.

Rival Anthropic is also reportedly preparing for an IPO and engaging with prospective investors. The company has been linked to a potential offering valuation between $1.5 trillion and $2 trillion, although those figures remain targets rather than confirmed market prices.

Anthropic reportedly raised $65 billion in May 2026 at a $965 billion valuation. Its eventual IPO pricing could influence how investors assess OpenAI’s own valuation and business prospects.

Some investors are reportedly considering waiting for greater clarity on Anthropic’s listing before committing additional money to OpenAI.

That creates a potentially significant test for the AI sector. Despite the enormous commercial promise of generative AI, investors increasingly need evidence that escalating infrastructure costs can translate into sustainable revenue and profits.

A $1.25 Trillion Valuation Faces Its Next Test

OpenAI’s proposed funding round highlights both the extraordinary investor interest in artificial intelligence and the growing pressure on companies seeking ever-higher valuations.

The $1.25 trillion target would place OpenAI among the world’s most valuable private businesses. Yet the reported reduction from $1.4 trillion suggests that even the biggest names in AI may face tougher questions as investors reassess the cost of the industry’s expansion.

For OpenAI, the immediate challenge is securing enough capital to fund its ambitions while maintaining investor confidence ahead of a possible IPO.

The next major milestone will be whether the company can complete the financing on its proposed terms. Until the deal is finalized, the $30 billion fundraising target and $1.25 trillion valuation remain reported expectations, not completed transactions.