OpenAI races to lock in $30B at a $1.4T valuation before Anthropic’s IPO

• OpenAI is moving quickly to raise about $30 billion at a valuation above $1.4 trillion, Reuters reports.

• SoftBank and MGX are in talks to join the funding round, while Anthropic is expected to go public in mid-November.

• At a $1.4 trillion valuation, OpenAI would be worth about 28 times its reported annual revenue rate of $50 billion.

During the week that Anthropic held its investor day on October 14, OpenAI was also meeting with long-term investment funds and government-backed wealth funds. These are the same types of investors its rival is trying to attract before going public. OpenAI, the company behind ChatGPT, is now trying to raise about $30 billion at a valuation above $1.4 trillion, Reuters reported, citing people who know about the matter.

SoftBank Group and MGX, a company based in Abu Dhabi, are both existing investors and are discussing joining the new funding round, one source said. OpenAI and SoftBank declined to comment. Anthropic and MGX did not immediately respond to requests for comment.

As Tech Funding News previously reported, UAE funds have discussed investing up to $10 billion in total. BlackRock and the University of California's investment fund are also in talks. OpenAI is telling investors that its value before the new money comes in will be fixed at $1.4 trillion, even though it has not yet chosen a main investor to lead the round.

Why OpenAI wants to set its price before Anthropic goes public

People familiar with the matter told Reuters that the two AI companies are seeking money from many of the same investors. These investors may have to decide whether to put money into two companies valued at more than $1 trillion, within days or weeks of each other. Some see OpenAI's quick fundraising push as an attempt to secure money that might otherwise go to Anthropic.

OpenAI also needs money to support its spending plans. Investors familiar with the company told Reuters that it needs cash to pay for its commitments to build infrastructure. It also wants extra money available in case a weak market for public listings delays its planned 2027 stock market debut.

The new funding round would come less than seven months after OpenAI raised $122 billion in March at a valuation of $852 billion. Amazon, Nvidia, and SoftBank led that round. A $1.4 trillion valuation would be about 64% higher. On September 16, TFN reported that OpenAI was considering a valuation of $1.2 trillion. It later reported that the company was looking to raise $30 billion at a $1.4 trillion valuation to provide funding while it waits to go public.

Can OpenAI keep its $1.4 trillion valuation while AI stocks fall?

The fundraising effort comes at a difficult time for the market. Companies in the Philadelphia Semiconductor Index have lost more than $1.6 trillion in market value in less than two weeks, according to Reuters. Investors are also worried about the debt used to build data centres for AI. CoreWeave, which has about $50 billion in debt, saw its shares and bonds fall sharply. AirTrunk REIT, Firmus, and SB Energy, which is backed by SoftBank, have withdrawn or paused their plans to go public. Bankers say several companies are waiting until after Anthropic goes public.

The big question is whether investors will agree to OpenAI's $1.4 trillion valuation before they can examine Anthropic's financial details. Once Anthropic makes its financial information public, investors will be able to compare the two companies when deciding how much each should be worth.