OpenAI in early funding talks at $1.2 trillion valuation

<h2>What is the new valuation?</h2>OpenAI is in early discussions with investors for a new funding round that could value the artificial intelligence startup at more than $1.2 trillion (£910 billion).The preliminary talks, first reported by the Financial Times, were initiated by investors. If finalised, the valuation would mark a 41 per cent jump from the $852 billion valuation OpenAI secured just six months ago, when it closed a record-breaking $122 billion funding round on 31 March.<h2>Why stay private?</h2>The fundraising talks emerge at a delicate moment for the AI industry's chief flagbearer. Just days ago, OpenAI chief executive Sam Altman agreed with calls to pace the development of frontier models, stating that a stock market flotation in 2026 would be 'ill-advised' given the intensive safety and alignment work required. Chief financial officer Sarah Friar has pointed to 2027 as a more realistic target for an initial public offering (IPO).But while Altman has publicly counselled caution, the capital markets are moving at a different speed. A private funding round allows OpenAI to secure billions of dollars in fresh capital without the rigorous disclosures of a public listing. The company would not have to publish a formal prospectus, share audited quarterly accounts, or detail the exact financial risks associated with incoming government safety regulations.<h2>How does the money stack up?</h2>The proposed $1.2 trillion valuation is steep, representing roughly 50 times OpenAI's annualised revenue. The company is currently generating about $2 billion a month, according to financial figures reported earlier this year.By comparison, public markets have recently shown signs of fatigue over massive AI infrastructure spending. Publicly traded Nvidia, which trades at a much lower revenue multiple despite earning tens of billions in actual profit, saw its shares rise just 0.6 per cent to $212.17 on Tuesday following a broader sector sell-off.Staying private also allows OpenAI to lean on a tight-knit circle of strategic backers whose business models are deeply intertwined with its own. In OpenAI's March funding round, Amazon committed $50 billion—with $35 billion of that contingent on an IPO or the achievement of artificial general intelligence—while Nvidia and SoftBank each pledged $30 billion. Microsoft also continued its heavy participation.<h2>What about the competition?</h2>Meanwhile, OpenAI's chief rival, Anthropic, is taking the opposite route. Anthropic, whose chief executive Dario Amodei recently published an essay calling for AI labs to pace their development, is preparing to market an IPO as early as mid-October. Some investors have floated a potential public valuation of up to $2 trillion for Anthropic, up from its last private mark of $965 billion.Whether OpenAI's $1.2 trillion valuation holds will depend on the final size of the round and who leads it. OpenAI has not commented publicly on the talks, and early-stage negotiations at this scale can frequently stall or see their terms altered before a deal is signed.