OpenAI races to raise $30 billion before Anthropic IPO - Cryptopolitan
- OpenAI is trying to raise about $30 billion. The deal could value the company at more than $1.4 trillion. Reuters reported that OpenAI wants to finish raising the money before Anthropic is expected to go public in mid-November.
- Investors are considering investing in two AI companies, each valued in the trillions, while the AI market has become more uncertain.
- Financial details that Anthropic must reveal before its IPO could make it harder for OpenAI to justify its own high valuation.
OpenAI is trying to speed up a funding round worth about $30 billion. The deal could value the company behind ChatGPT at more than $1.4 trillion. Reuters reported this, citing people who know about the plans. The report said OpenAI wants to secure the investment before its rival Anthropic is expected to go public in mid-November.
The timing is tight
Anthropic is expected to sell shares to the public in mid-November. Before doing so, it will give investors their first detailed look at its finances. Reuters reported that OpenAI wants to finish raising money before these details help investors compare the two AI companies more closely.
OpenAI and Anthropic are seeking money from many of the same investors, including government-owned investment funds and large financial institutions. Both companies are approaching possible investors within weeks of each other. Reuters reported that some investors believe OpenAI is trying to finish raising money early so it can secure funds that might otherwise go to Anthropic's IPO.
OpenAI has already met with investors who usually hold shares for a long time and with government-owned investment funds. Its existing investors, Japan's SoftBank Group and Abu Dhabi's MGX, are also discussing whether to join the funding round.
OpenAI explains its revenue plans
OpenAI is pointing to its fast-growing revenue to explain why it believes the company is worth so much. It has told investors that its annualized revenue reached $50 billion after it launched its GPT-6 Astra model. The company says this figure could rise to $70 billion by the end of the year.
Annualized revenue means estimating how much money a company would earn over 12 months if its current rate of earning money continued. It is not the same as the amount the company has already earned.
OpenAI also says that cutting prices for its cheaper models has led more people to use them. The company may cut prices further. Lower prices could attract more users, but they could also mean the company earns less money from each customer.
Investors are becoming more careful about AI spending
Bond yields are rising, technology stocks are moving up and down sharply, and investors are asking questions about the debt used to build AI data centers. These concerns have made investors more careful about paying very high prices for companies.
Because investors have become more cautious, several companies have reconsidered plans to sell shares to the public. AirTrunk REIT, backed by Blackstone; Firmus, backed by Nvidia; and SB Energy, backed by SoftBank, have withdrawn or paused their offerings. Reuters reported that Holtec, a company that provides services to the nuclear power industry, also canceled its planned US stock market listing last month because of uncertainty about demand for data centers.
Funding for AI infrastructure is also facing closer attention. The previous week, CoreWeave's shares and debt prices fell sharply as investors took another look at the risks linked to the company's nearly $50 billion in debt.
OpenAI needs more money to pay for its infrastructure commitments and improve its financial position. It is also aiming to go public in 2027. Having enough money is especially important if weaker markets cause any delays to its stock market listing.