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OpenAI has reduced its valuation target for its latest funding round after facing resistance from some investors over a $1.4 billion price tag, as it strives to raise $30 billion before going public next year.
The creator of ChatGPT is in the final stages of a deal that is expected to value the company at $1.25 billion, according to people with knowledge of the matter.
That would represent a jump of nearly 50 percent from its current valuation of $852 billion, but is lower than the price offered to investors earlier this month, according to people familiar with the matter.
The lower valuation target comes as U.S. tech stocks have fallen sharply, amid growing concerns about the sustainability of the debt-fueled AI infrastructure boom.
Morgan Stanley and San Francisco-based technology fund Dragoneer had launched OpenAI to the bank’s private clients at a pre-money valuation of $1.4 billion, according to documents seen by the FT.
Several people with knowledge of the Morgan Stanley-led process said client demand was weaker than in the past. “There was no clamor,” said one of those present. “All the previous times (OpenAI), there was a frenzy. This time it’s a bit of a thud.”
Some investors were also suffering from fatigue, or “indigestion,” after investing heavily in previous rounds, some of the people said. OpenAI raised $40 billion in March 2025 and a record $122 billion in March this year. Its main rival Anthropic has also raised almost $100 billion this year.
Other investors told the FT they would prefer to wait to see how Anthropic prices in an IPO, expected later this year, before committing to its rival.
OpenAI aims to raise $30 billion as a “bridge” before its own public offering. This should happen in the first half of 2027, a source close to the company said, although no date has been set.
U.S. investment group Coatue and funds from the United Arab Emirates were in discussions to lead the round, one of the people familiar with the deal said.
The deal also gives OpenAI a right of first refusal on new computing power developed by its partners in the UAE, they added.
The company has given potential investors until October 30 to commit to the deal and could ultimately raise less than $30 billion depending on investor interest.
OpenAI declined to comment. Coatue did not immediately respond to a request for comment. CNBC reported on Thursday that OpenAI was close to closing a deal for $1.25 billion.
Jimmy Chang, chief investment officer of the Rockefeller Global Family Office, which has exposure to OpenAI and Anthropic, said uncertainty surrounding the two companies’ IPOs was weighing on the U.S. stock market as a whole.
“The market needs a successful IPO,” Chang said. “These businesses need financing. »
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