OpenAI raises $11B at a $1.25T valuation

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.

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.

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.

This valuation is a function of early accumulation of compute. They could rent it to Anthropic, or poach more Anthropic engineers.

How many companies have a public market valuation over 1T, that seems like a lot

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.

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.