OpenAI Completes First Tranche of About $11 Billion in Financing at a $1.25 Trillion Valuation

Has OpenAI's much-watched funding round finally landed, at least in stages?

Just now, Bloomberg, citing people familiar with the matter, reported that OpenAI has completed the first tranche of its new funding round, amounting to about $11 billion, with the round valuing the company at $1.25 trillion.

Bloomberg disclosed that the funds were wired to the company on Friday, with the remainder expected to be completed in the coming weeks, at which point the total for the entire round could reach $20 billion. OpenAI declined to comment. In other words, $11 billion is the portion reported as completed, while $20 billion remains the potentially achievable total size.

At the end of September, foreign media reported that OpenAI hoped to raise at least $30 billion and was seeking a pre-money valuation of about $1.4 trillion. The money was seen as a bridge round after postponing its IPO, providing continued funding support for the company before it goes public.

By late October, the Financial Times reported that OpenAI had cut its fundraising target by about $10 billion to roughly $20 billion, and its target valuation from $1.4 trillion to $1.25 trillion. Reuters relayed that some investors had reduced their planned investment amounts, and the first tranche was not expected to reach the revised $20 billion target in one go.

The $11 billion that has now landed is of course a huge sum, but it is still a considerable distance from OpenAI's original vision for the round. At the same time, the fundraising is still ongoing, and the first tranche amount cannot be taken directly as the final result of the entire round.

The participants are also gradually coming into view. Bloomberg's latest report mentioned that Coatue and T. Rowe Price participated in the first tranche; other investors in the round include SoftBank, Sequoia Capital, Founders Fund and Andreessen Horowitz, with a consortium of Emirati investors also joining. OpenAI is also working with investment banks to raise funds from high-net-worth individuals and retail investors.

As the fundraising target for this round was lowered, the market's focus has naturally shifted to a more practical question: where will the money to support these numbers be earned back from?

OpenAI management's response is that demand is still there, and investment must continue.

On November 6, OpenAI Chief Financial Officer Sarah Friar was interviewed at the Citi TMT Leadership Summit in California. Speaking about the pressure data centers face after the U.S. midterm elections, she said the company still needs to continue investing to meet customer demand; it must rely both on the partnerships it has previously established with major cloud service providers and on continued fundraising going forward.

She also made a remark quite in the style of a CFO: "A good CFO always raises money when they can." She made clear that this round of fundraising is still ongoing and stressed that AI demand is real.

The backdrop to these remarks is that data center construction has become a controversial issue in U.S. local politics.

According to a Ballotpedia analysis cited by CNBC and its supplementary tally, of the 41 local ballot measures in 10 states in this midterm election, 40 results leaned toward restricting data center construction or rejecting measures supporting development. Residents' concerns are very concrete, including rising electricity bills, environmental impact, and job pressure brought by AI.

For OpenAI, these controversies bear directly on whether computing power can be deployed as planned. Fundraising can support expansion, but data centers ultimately have to be built in specific communities and connected to local power grids.

On November 5, OpenAI announced a series of commitments intended to apply to data centers it will own and operate in the future: bearing the full cost of power supply, soliciting community input, making construction plans public, and stopping the practice of signing confidentiality agreements with public officials when discussing future sites. The company also proposed policy recommendations, hoping to push similar requirements into law.

In the interview, Friar said that if the elections mean greater outside attention to the relationship between data centers and communities, OpenAI will continue to engage with communities and build trust. She does not believe the election results have fundamentally changed the company's business.

She also disclosed that OpenAI is still studying the possibility of an IPO in 2027. According to reports, the company confidentially filed a prospectus with the U.S. Securities and Exchange Commission in June this year. However, considering a 2027 listing does not mean a listing timetable has been set.

This makes the current fundraising progress all the more noteworthy: with the listing timetable not yet finalized and infrastructure investment still needing to continue, how much room for maneuver new capital can give OpenAI, and whether subsequent funds can arrive as expected, remain to be seen.

Next, what is most worth tracking in this round is whether it can ultimately reach about $20 billion, and how the company will convert its continuous investment in computing power into revenue and profitability capable of supporting a trillion-dollar valuation.

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This article is from the WeChat public account "Machine Heart" and is published by 36Kr with authorization.