OpenAI Valuation Drops $150 Billion: Is the AI Boom in Trouble?
OpenAI has reportedly lowered its proposed value by $150 billion to $1.25 trillion because investors are worried about how much money companies are spending on AI.
Key takeaways
- OpenAI lowered the value it is asking investors to accept by $150 billion, from $1.4 trillion to $1.25 trillion.
- Even after this change, the new value is still 47% higher than OpenAI's previous value of $852 billion in March 2026.
- OpenAI must show investors why it is worth more than $1 trillion, especially as they question whether the huge cost of building AI systems will bring in enough money.
OpenAI has reportedly lowered its proposed value by $150 billion as it gets close to finishing a major fundraising round. The company now wants investors to value it at $1.25 trillion instead of the $1.4 trillion discussed earlier. This information comes from an October 23 Bloomberg report.
This is a drop of about 10.7%. It comes as OpenAI tries to raise another $30 billion to pay for its big plans to grow.
Even though OpenAI's new proposed value is still much higher than its value during its last fundraising round, the change suggests investors are becoming more careful about putting huge amounts of money into AI development.
Why Is OpenAI's Value Going Down?
OpenAI's proposed value is being lowered at a time when more investors on Wall Street are worried that technology companies are spending too much money on the computers, data centers, and other equipment needed for AI without earning enough money back.
Technology stocks have also faced selling pressure recently. More investors have been selling these stocks after companies, including Meta Platforms and Tesla, reported financial results that included both good and disappointing news.
According to the Financial Times, some investors also pushed back against OpenAI's earlier goal of being valued at $1.4 trillion. Even so, the new proposed value is still about 47% higher than the $852 billion OpenAI was valued at after raising a record $122 billion in March 2026.
This means OpenAI's proposed value has gone down during its latest talks with investors. It does not mean the company's value has actually fallen below the value agreed upon in its last completed fundraising round.
OpenAI Wants to Raise $30 Billion Before a Possible Stock Market Launch
Even though OpenAI has lowered the value it hopes investors will agree to, it is still working on what could be one of the biggest fundraising deals ever for a privately owned technology company.
Investment company Coatue Management is reportedly talking about becoming one of the main investors leading the deal. BlackRock and investment funds from the United Arab Emirates have also taken part in discussions about investing money.
Investors could make their final promises to provide money by the end of next week. However, both the amount OpenAI raises and the value investors agree on could still change.
These talks are also happening as OpenAI prepares for a possible initial public offering, or IPO, in 2027. An IPO is when a company first offers shares for people to buy on the stock market. OpenAI had previously planned to enter the public stock market this year but has delayed those plans.
OpenAI's biggest challenge right now is convincing investors that its fast growth and the money it could earn in the future make it worth more than $1 trillion. It must do this while investors are becoming increasingly worried about how expensive it is to build powerful AI systems.