Key takeaways
- OpenAI cut its proposed valuation by $150 billion, from $1.4 trillion to $1.25 trillion
- The revised valuation still represented a 47% increase from OpenAI’s previous $852 billion valuation in March 2026
- OpenAI faces pressure to justify its trillion-dollar valuation as investors question whether AI infrastructure costs will deliver sufficient returns
OpenAI reportedly slashed its proposed valuation by $150 billion as it approaches the final stages of a major fundraising round. The company is now seeking a valuation of $1.25 trillion, down from the $1.4 trillion that was previously discussed with investors, according to an October 23 Bloomberg report.
The approximately 10.7% reduction comes as OpenAI tries to raise another $30 billion to finance its ambitious expansion plans.
Although the revised valuation is still way higher than the company's previous funding valuation, the adjustment suggests investors are becoming more cautious about the enormous sums being poured into AI development.
Why Is OpenAI's Valuation Falling?
The valuation reduction comes during a time of growing concerns on Wall Street that technology companies are spending too aggressively on artificial intelligence infrastructure without showing sufficient returns.
Technology stocks have also faced selling pressure recently after mixed earnings reports from companies including Meta Platforms and Tesla.
According to the Financial Times, OpenAI also encountered investor resistance to its earlier $1.4 trillion valuation target. Nevertheless, the revised figure is still an approximately 47% increase over OpenAI's $852 billion valuation after its record $122 billion fundraising round in March of 2026.
The latest negotiations therefore represent a reduction in OpenAI's proposed valuation rather than an actual decline from its last completed funding round.
OpenAI Seeks $30 Billion Ahead of Potential IPO
Despite lowering its valuation expectations, OpenAI is pursuing one of the largest private financing deals in technology history.
Investment firm Coatue Management is reportedly discussing a role as co-lead investor, while BlackRock and investment funds from the United Arab Emirates have also participated in fundraising discussions.
Investor commitments could be finalized by the end of next week, although the funding amount and valuation remain subject to change.
The negotiations also come as OpenAI prepares for a potential initial public offering in 2027, having postponed plans to enter public markets this year.
For OpenAI, the immediate challenge will be convincing investors that its quick growth and long-term revenue potential justify a trillion-dollar valuation despite mounting concerns about the cost of developing powerful AI systems.
