With its planned IPO on ice for the moment, OpenAI is pitching a $30 billion funding round to a group of United Arab Emirates sovereign funds led by Abu Dhabi’s MGX, along with BlackRock, at a $1.4 trillion pre-money valuation, Bloomberg reported Monday. There is no lead investor, and the price was set by OpenAI rather than negotiated. Meanwhile CEO Sam Altman has sparked a firestorm in DC with comments that the world should accept “some bad things happening” for the benefits of AI.
The OpenAI round
The UAE funds are considering an investment up to $10 billion between them at that $1.4 trillion valuation – which is is 64% above the $852 billion post-money valuation of the $122 billion round in March. The figure would also place OpenAI’s valuation above Anthropic, which was at $965 billion in May.
OpenAI’s annualized revenue has reportedly passed $40 billion, up 70% since July. That makes the ask roughly 35x run-rate for a company that Fortune says booked $6.7 billion of revenue and an operating loss in Q2, and that the FT reported spent $34 billion last year. One FT source said OpenAI “needs capital.” OpenAI says the March round left it with plenty. OpenAI filed confidentially for an IPO on June 8. Then, on Sept. 12, Altman told Fortune it wouldn’t be 2026 – “an ill-advised moment to go public,” given what’s going on with safety (and then just recently said ‘screw it’ – AI is worth the danger). That said, in April the WSJ reported that OpenAI had missed revenue and user targets and that CFO Sarah Friar was worried the company might not be able to pay for future compute contracts if revenue failed to catch up.
Then there’s the backstop. As we reported last November, Friar suggested the federal government could “backstop” OpenAI’s data-center financing. In June, as we detailed, Altman began floating a plan to hand small OpenAI equity stakes to ordinary Americans, which we read as a backdoor backstop. We asked at the time whether the bailout would come before the IPO or after. Nobody mentioned the third option: a $30 billion bridge round, priced by the issuer, in between.
DeepSeek
Overnight, Bloomberg also reported that DeepSeek is close to locking in at least 80 billion yuan ($12 billion) of new funding, with signed term sheets that could take the total to 100 billion yuan – twice the 50 billion it originally set out to raise. Tencent and CATL are writing the biggest checks. This is the same round DeepSeek paused in late July, as we noted, after transcripts leaked of founder Liang Wenfeng saying that Huawei was giving DeepSeek about 16,000 Ascend 950s while the internet giants got hundreds of thousands, and that DeepSeek could get hold of some processors he called “noncompliant.” The round restarted in August at a valuation of about $74 billion and has now blown through its target. On annualized revenue reported at $400-500 million in July, that valuation is well over 100x sales. OpenAI at 35x looks cheap next to it.
