OpenAI is close to raising $30 billion at a $1.25 trillion valuation

What is reportedly happening

As The Motley Fool reported, OpenAI is on the verge of closing a new funding round. The company behind ChatGPT is set to raise $30 billion at a valuation of $1.25 trillion. Investors from the United Arab Emirates and Coatue, an investment firm, are leading it.

A valuation is the price tag investors put on the whole company. It is set by what they are willing to pay for a stake, not by what the company earns today. Talks began in September, when investors approached OpenAI rather than the other way around.

This is a report of a deal that is close, not one that has been announced as finished, so details could still move.

A lower number than OpenAI wanted

OpenAI had first aimed for a $1.5 trillion valuation. The Motley Fool reads the lower figure as one more sign of fatigue in the AI sector. It points to the fall in CoreWeave's stock and a sell-off in Meta after it reported negative free cash flow, meaning more cash going out than coming in.

The article also argues that this should not set off alarms. The new figure is well above the $852 billion OpenAI fetched in the spring. And while $30 billion is less than the company raised in its last round, it is still a very large sum.

That reading is the author's opinion. The facts are the two valuation figures and the size of the raise, and you can weigh them yourself.

Why Anthropic's timing matters

The comparison with Anthropic runs through the whole piece. Anthropic, another leading AI lab, filed confidentially to go public last month. It is expected to complete its IPO, the first sale of its shares on a public stock market, in November. It is reportedly targeting a $2 trillion valuation.

Sam Altman, OpenAI's CEO, has told employees that now is not the right time to go public. OpenAI is still aiming for 2027. The Motley Fool argues that listing at the same time as Anthropic would be a mistake, and that waiting a few months lets investor appetite for another huge IPO recover.

The article also says the raise shows OpenAI has fallen behind Anthropic. That is the outlet's judgment, not a measured result.

What it means for AI stocks

The article calls the funding round a welcome data point for AI stocks, which it says could use one. Its larger argument is that the sector's future depends on OpenAI and Anthropic, the two labs supplying the technology most people now simply call AI.

The money at stake is huge. The four major hyperscalers, the giant cloud companies that build the data centers AI runs on, are set to spend upwards of $700 billion on capital expenditures, meaning long-term investments like buildings and chips. The piece says there has never been an investment cycle this big.

That spending only pays off if businesses and consumers use the labs' products and the labs eventually become profitable. So Anthropic's IPO is the next big test. If it reaches its target and the stock climbs, as Space Exploration Technologies did, the article suggests AI stocks could rebound.

More detail should come when Anthropic files its S-1, the prospectus that includes a company's complete financial reports.

What to take from it as a user

A valuation says what investors expect, not what a product does for you today. Nothing in the report points to a change in ChatGPT plans or prices.

Still, a company priced for very large growth is under pressure to earn money. Over time that can show up as new tiers, usage limits or bundled products. It is sensible to keep your prompts, documents and processes in a form you can move to another tool if you need to.