OpenAI secures $11 billion at a $1.25 trillion valuation

OpenAI has received about $11 billion in fresh funding at a reported pre-money valuation of $1.25 trillion, according to people familiar with the transaction. Omor Ibne Ehsan reports for 24/7 Wall St. that the payment represents the first closed portion of a larger financing round.

The company had reportedly sought to raise at least $30 billion at a valuation of $1.4 trillion. Some early reports put the target even higher. OpenAI CFO Sarah Friar disputed the higher figures in a television interview, saying they originated in media coverage rather than the company.

SoftBank and Abu Dhabi investment firm MGX participated in the initial funding, the report says. The round could eventually reach $20 billion, with a possible additional $9 billion discussed in separate reporting. That follow-on funding has not yet closed, and OpenAI has not disclosed the lead investors, final terms, or intended use of the money.

Growth claims and funding pressure

Friar says OpenAI’s business grew 70% from the previous quarter in the third quarter. She also says its enterprise business doubled and that consumer and business customers each account for about half of revenue. The company did not provide a revenue total. Friar cited 1.2 billion weekly ChatGPT users and said advertising had reached a $1 billion annualized revenue run rate by August.

The lower valuation and staged funding matter beyond OpenAI. Microsoft records changes in the value of its OpenAI stake in its accounting results, although its cloud business remains far larger. Nvidia faces more direct exposure to the ability of major AI labs to finance data centers and buy computing hardware. Nvidia has said OpenAI’s existing and planned commitments amount to roughly 12 gigawatts of its computing capacity.

Investors will now watch whether OpenAI completes the larger round and whether other leading AI companies can sustain their valuations in a more cautious market.