This will also make it even harder to avoid any future IPO being a down round. They’re almost certainly worth much less than Anthropic and Anthropic is, per reports, struggling to keep its valuation much above 1T, and even that may fall through.
OpenAI raises $11B at a $1.25T valuation (247wallst.com)
47 pointsby armcatan hour ago24 comments
cmiles8 13 minutes ago
The real headline is that they couldn’t hit what they wanted in terms of valuation and funds raised. Just were not enough people willing to invest given concerns that it may be downhill from here for a while on AI.
onlyrealcuzzo 8 minutes ago
The bigger story is that their burn rate is so high.
Unless things change considerably, this is less than a 6 month runway.
It's not common for raises to give you this little runway.
You could read into it that they expect to IPO in far less than that amount of time, and this is a short bridge until then.
chris_va 6 minutes ago
We always see these headlines and think "is XYZ company actually worth that much?"
Class A stock gets paid out first, so "valuation" here is not what a retail investor would necessarily pay for class C.
Basically, do these people think that they'll get their $11B back? If so, they are ok with a high "valuation" because there is little risk. And with OpenAI's corporate structure, who knows what is actually happening.
odyssey7 14 minutes ago
I think OpenAI is one of the most important companies in a generation, but on a tangent, I remember the first time a company broke a $1T market cap, and it was a significant moment. Nowadays multi-trillion-dollar valuations are becoming more common — I wonder how much it reflects inflation vs companies being genuinely bigger than they used to be. If it’s more about inflation, then we can expect to see dozens and hundreds more in the coming decades. Founders: recalibrate your ambition for the new era.
Hendrikto 11 minutes ago
It is pretty much all inflation. Just look at the gold price over the same time frame. Gold did not become more productive or scarce. In fact, we have more of it now than we ever had.
satvikpendem 5 minutes ago
Valuation dropped, that's the real news. Altman couldn't raise the amount he wanted to so it's gonna just be a dumping ground in the public markets.
xnx 7 minutes ago
OpenAI, Anthropic, Google, Nvidia, Grok: they can't all be worth $1T (or $1T additional in Google's case) at the same time.
naveen99 34 minutes ago
This valuation is a function of early accumulation of compute. They could rent it to Anthropic, or poach more Anthropic engineers.
fancyfredbot 20 minutes ago
Not sure how long you'll be able to sell compute to anthropic for. They are constrained right now but they have an insane pipeline of take or pay contracts, and if those are delivered they'll be drowning in compute in a couple of years time.
raincole 8 minutes ago
Anthropic has a higher valuation than OpenAI.
124512310X 18 minutes ago
They wanted to raise 20 billion "from family offices and high net-worth individuals", i.e., fleece the Saudis again but failed:
https://www.wheresyoured.at/running-dry/
They got a bit of pocket change at this insane valuation.
xfour 40 minutes ago
How many companies have a public market valuation over 1T, that seems like a lot
jordanb 35 minutes ago
It's cheap if you buy the story that they're building a digital god to rule us all.
rbinv 23 minutes ago
About 14:
Apple ($4.98T), NVIDIA ($4.51T), Microsoft ($3.94T), Alphabet ($3.49T), Amazon ($2.80T), TSMC ($1.95T), SpaceX ($1.82T), Saudi Aramco ($1.69T), Meta ($1.56T), Tesla ($1.42T), Broadcom ($1.40T), Berkshire Hathaway ($1.22T), Eli Lilly ($1.21T), (Walmart ($0.996T))
Hendrikto 10 minutes ago
1T isn‘t what it used to be. Inflation is exponetial.
enraged_camel 35 minutes ago
The story here is that Sam wanted to raise a lot more, but could not. Investors almost certainly want to see how the Anthropic IPO plays out before deciding whether to keep showering these companies with money.
naveen99 32 minutes ago
Sam raised a $100B in previous round. I think a direct listing ipo would see their valuation go up to $4T, and then they could do some at the market sales as needed.
freecodeio 20 minutes ago
why not just value it at 40T if we're all just throwing numbers randomly
satvikpendem 6 minutes ago
They didn't actually raise that 100 billion fully, tranches were contingent on different factors, some of which haven't even been hit yet.
bushbaba 28 minutes ago
Valuation wouldn’t hold if public. He couldn’t raise the 30B he wanted. I’m not sure how much runway OpenAI has, but sounds like a similar to Anthropic story with valuation likely if in the public markets declining.