Report: OpenAI closes $30 billion bridge financing round to bridge pre-IPO period

Artificial intelligence leader OpenAI Group PBC may be planning to go public in the near future, but private funding rounds have not yet done so.

In fact, the company is currently believed to be negotiating with investors for an additional $30 billion investment that would increase its value to a staggering $1.25 trillion, making it the most valuable private company of all time.

According to a report from CNBC, OpenAI is in talks today with potential backers from the United Arab Emirates who will lead the new round, with US venture capital firm Coatue also expected to participate. The round is positioned as an “opportunistic” bridge for OpenAI to provide OpenAI with the capital it needs to continue investing in its business while completing plans for an IPO.

The UAE investors are understood to have first approached OpenAI last month to propose another large round of funding. Bloomberg reported on these initial discussions last month, and now it appears that the talks have reached an advanced stage. According to CNBC’s report, OpenAI hopes to get investors to sign on the dotted line by the end of the new week, although the exact size of the investment has not yet been determined.

The proposed round is much smaller than OpenAI’s last big raise in March. At the time, the company raised a staggering $122 billion from investors including Amazon.com Inc., SoftBank Group Corp. and Nvidia Corp. at a post-money valuation of $852 billion. It believed at the time that the money would be enough to keep the company afloat until it could finalize the details of its long-awaited initial public offering, and in preparation for that, it duly filed its confidential prospectus with the Securities and Exchange Commission in June.

For a time, it was believed that OpenAI was planning to go public sometime this year, but the company now appears to have cooled on the idea. In August, Chief Financial Officer Sarah Friar told employees that OpenAI “will be a publicly traded company in 2027,” but less than a month later, Chief Executive Sam Altman appeared to backtrack, saying he believed it would be “ill-advised” to take the company public this year.

OpenAI’s change of plans has paved the way for its rival Anthropic PBC to beat it in the public markets. The creator of Claude is planning a major IPO of his own, reportedly seeking a valuation between $1.5 trillion and $2.5 trillion. Plans are believed to be much further along, and many believe it could be a public company in time for Thanksgiving.

In addition to the new investment, OpenAI is also reportedly discussing a separate commercial deal with UAE investors that would give it access to more computing capacity in the Middle East.

Photo: OpenAI