According to reports from Bloomberg News, OpenAI is holding discussions with investors about potentially raising $30 billion in new funding at a $1.4 trillion valuation. The company has reportedly pushed back its initial public offering plans, with CEO Sam Altman stating the firm would refrain from going public this year. This valuation represents a significant increase from the company's previous funding round in March, when it raised $122 billion at a $852 billion valuation. The fundraising discussions are at an early stage and terms could change, with the demand for the round being led by investors as the firm sees strong revenue growth. The new financing would represent a sharp step-up in valuation—from about 21 times its current revenue run rate to roughly 35 times. As per Business Standard, the company is seeking a valuation of around $1.4 trillion, not including the money raised, potentially vaulting it back above longtime rival Anthropic's most recent private market valuation.
As reported by Bloomberg News, Altman explained the company's decision to delay the IPO during a Tuesday interview, stating that OpenAI wants to navigate a period of heightened artificial intelligence safety concerns without the pressure of being a newly public company. "We just want to get our feet under us and make sure we understand how to operate in this new way, [and] be able to make some of these decisions in front of us without the pressure of being a newly public company," Altman said. He believes investors will be "patient" with the company's IPO planning. The proposed round would serve as a bridge financing to provide capital in place of an IPO, with OpenAI not immediately responding to requests for comment. The postponement makes private financing more palatable, giving the company runway without immediately testing public-market appetite. According to Business Standard, the ChatGPT maker is currently "adjusting" to a "new level" of AI capability and the added safety requirements that coincide with it.
The funding round comes amid growing scrutiny over AI safety risks, with both OpenAI and Anthropic facing mounting concerns about the technology's potential for catastrophic harm. Earlier this month, Anthropic CEO Dario Amodei issued a 4,000-word essay highlighting AI risks and proposing a framework to slow frontier AI development. In his essay, Amodei warned that "The people building AI earnestly believe that it could kill us all by the end of the decade." This concern has gained support from top executives across the industry, with OpenAI's Altman endorsing Amodei's plan and calling for independent evaluators to help safeguard the technology. The debate intensified after an Anthropic researcher resigned, issuing stark warnings about AI risks on social media. Recently, OpenAI's technology has been involved in security incidents, including targeting Australian and American government websites, and in July, an OpenAI model breached Hugging Face's infrastructure during a security test. An antitrust class-action lawsuit was filed earlier this month accusing Anthropic, OpenAI, Google, and SpaceXAI of making an illegal agreement to coordinate a slowdown in artificial intelligence development.
According to Reuters, OpenAI's annualized revenue run rate is nearing $70 billion, having risen more than 70% since the beginning of the third quarter. This represents a significant acceleration from the company's previous run rate of $40 billion that was reported in July. The company's revenue run rate has topped $40 billion, according to internal figures, helped by newer model releases and rising enterprise adoption. OpenAI serves more than 2 million business customers, with products ranging from ChatGPT subscriptions to enterprise offerings and developer APIs. Since July, enterprise sales have more than doubled, and consumer revenue during the third quarter also surpassed its total for all of last year. The fundraising discussions are being led by investors as the firm sees strong revenue growth, with the latest round serving as a bridge to provide additional capital in place of an IPO.
At its developer event on Tuesday, OpenAI unveiled a new always-on AI agent called Dots that competes directly with products like Muse from Meta Platforms Inc. The company is also introducing a new high-end $500 paid tier with higher usage limits and faster processing speeds. ChatGPT currently has over 1.2 billion weekly users, while Codex and ChatGPT Work have reached over 35 million weekly users. These products complement OpenAI's efforts to generate sustainable revenue streams as it looks to raise more capital. The growth comes as OpenAI expands the number of products available to companies and developers, with the money also going toward improving computer systems and infrastructure that will allow for the operation of increasingly powerful AI systems. According to Business Standard, OpenAI is also shaking up its subscription offerings by debuting a new high-end $500 paid tier with higher usage limits and faster processing speeds, and reducing certain usage limits for its $200 plan.
As Bloomberg reports, rival AI giant Anthropic is expected to go public in November, with the company's IPO prospectus outlining plans to spend $518 billion on cloud computing and infrastructure. Anthropic's potential listing could value the company at more than $2 trillion, significantly higher than OpenAI's current valuation. This competitive dynamic highlights the intense pressure on AI companies to raise substantial capital while navigating the complex landscape of AI safety concerns and regulatory scrutiny. The contrasting approaches between OpenAI's private funding strategy and Anthropic's public market ambitions reflect different corporate philosophies and market conditions in the rapidly evolving AI sector.
