OpenAI Lowers Valuation to $1.25 Trillion Ahead of Anthropic IPO

The Financial Times reports that OpenAI has cut its valuation target for the latest funding round to $1.25 trillion, below the $1.4 trillion figure mentioned earlier this month.

Even at this reduced level, the valuation is almost 50% higher than the $852 billion valuation from March. Investors have until October 30 to make commitments.

What Caused OpenAI's $1.4 Trillion Proposal to Falter?

Morgan Stanley and the tech fund Dragoneer brought the round to the bank's private wealth clients, pitching a $1.4 trillion pre-money valuation, according to documents seen by the FT.

Several insiders indicated that demand has been weaker compared to previous OpenAI rounds.

"There has been zero clamouring. All the prior times [OpenAI] have been on there's been a frenzy. This time is a bit of a thud," a person familiar with the deal said.

Some of those sources noted that investors were feeling "indigestion" after committing to earlier rounds, where OpenAI raised $40 billion in March 2025 and a record $122 billion in March of this year.

Coatue and UAE funds are in discussions to lead the new round, a person informed the FT. CNBC, which gave the $1.25 trillion figure on Thursday, also described it as a pre-money valuation. That sets the new target around $150 billion lower than the initial offer.

Why Some Investors Are Holding Back for Anthropic

Other investors gave the FT a different reason for waiting. They prefer to see the pricing of Anthropic's IPO, expected in mid-November, before deciding on OpenAI.

Anthropic has also lowered its valuation expectation. Some investors have discussed a $1.5 trillion valuation for the listing, down from the $2 trillion it originally targeted, after slower third-quarter growth.

Based on these numbers, the valuation gap between the two labs has widened to about $250 billion, from approximately $100 billion earlier this week.

OpenAI intends to use the $30 billion as a "bridge" to its own public listing, likely by the first half of 2027. CEO Sam Altman ruled out a 2026 IPO last month, citing safety concerns.

Why the Wider Stock Market Is Following Both Companies

The reduced valuation comes amid a sell-off in US tech stocks, fueled by concerns over debt-financed AI spending. Chip stocks have lost $2 trillion over eight trading sessions this month.

Jimmy Chang of the Rockefeller Global Family Office said the uncertainty surrounding both IPOs is affecting US stocks. His office has exposure to both OpenAI and Anthropic.

"The market needs to see a successful IPO. These companies need funding," Chang added.

OpenAI may ultimately raise less than $30 billion, depending on investor interest. The October 30 deadline will clarify the level of demand at the $1.25 trillion valuation before Anthropic announces its public price.