OpenAI rushing to raise funds worth $30 billion before Anthropic's IPO

OpenAI is pushing to accelerate a funding round of about $30 billion that could value the ChatGPT maker at more than $1.4 trillion. Reuters reported, citing people familiar with the matter, that the company wants to secure the investment before rival Anthropic’s expected IPO in mid-November.

The timing is tight

Anthropic is expected to go public in mid-November, giving investors their first detailed look at its financials. Reuters reported that OpenAI wants to close its own funding round before the IPO disclosures give investors a clearer basis for comparing the two AI companies.

OpenAI and Anthropic are vying for investment from the same pool of sovereign wealth funds and major institutional investors, with both companies courting potential backers within weeks of each other. Reuters reported that some investors see OpenAI’s push to close its funding round early as an effort to secure capital that might otherwise flow into Anthropic’s IPO.

OpenAI has already met with long-only investors and sovereign wealth funds. Existing backers SoftBank Group of Japan and Abu Dhabi’s MGX are also in discussions about joining the funding round.

OpenAI launches revenue pitch

OpenAI is pointing to its rapid revenue growth to justify its valuation target. The company has told investors that annualized revenue reached $50 billion following the launch of its GPT-6 Astra model and could rise to $70 billion by year-end.

Annualized revenue projects a company’s current revenue run rate over 12 months rather than measuring income already earned.

OpenAI also says price cuts on its cheaper models have boosted usage, with further reductions still possible. While lower prices could attract more users, they may also squeeze revenue per customer.

A jittery market for AI money

Rising bond yields, volatile tech stocks and questions about the debt behind AI data centers have made investors more cautious about paying up.

Due to this investor caution, a number of companies have reconsidered their listing plans. Blackstone-backed AirTrunk REIT, Nvidia-backed Firmus and SoftBank-backed SB Energy have withdrawn or paused their offerings, while nuclear services company Holtec scrapped its planned US listing last month over uncertainty about data center demand, Reuters reported.

AI infrastructure financing is facing similar scrutiny, with CoreWeave’s shares and debt prices plunging the previous week as investors reassessed the risks associated with its nearly $50 billion in borrowings.

OpenAI needs fresh capital to fund its infrastructure commitments and strengthen its balance sheet as it also targets an IPO in 2027, especially if weaker markets lead to any forms of delay in the listing.

The smartest crypto minds already read our newsletter. Want in? Join them.