American billionaire Sam Altman’s OpenAI raises $11 billion at $1.25 trillion valuation as AI stocks tumble

American billionaire Sam Altman’s OpenAI has raised $11 billion in fresh funding at a $1.25 trillion valuation, even as a sharp selloff in artificial intelligence stocks forced the company to scale back its fundraising ambitions.

The money, wired on Friday, represents the first close of a larger round that could reach about $20 billion, with the remaining commitments expected in the coming weeks, according to Bloomberg. Coatue Management and T. Rowe Price led the first close.

The new valuation marks a 46.7% jump from the $852 billion OpenAI was valued at in March, when it raised $122 billion. However, it falls well short of the company’s original plan.

In late September, Bloomberg reported that OpenAI was targeting at least $30 billion at a valuation of about $1.4 trillion. The company later cut its goal to between $15 billion and $20 billion, as investors grew uneasy about the sustainability of AI infrastructure spending.

Other investors in the broader round include SoftBank Group, Sequoia Capital, Founders Fund and Andreessen Horowitz, while a group of investors from the United Arab Emirates has also joined, according to Nairametrics. OpenAI is also working with investment banks to raise money from wealthy individuals and retail investors.

The timing reflects a difficult moment for the AI industry. On Thursday, the Nasdaq Composite fell 5.5% and entered correction territory, while the Nasdaq-100 lost about $2.3 trillion in market value. Investors fled AI-linked stocks after Democrats won control of Congress and many pledged tighter restrictions on data centers.

Meanwhile, rival Anthropic faces similar pressure. Hours before the OpenAI report, Bloomberg reported that potential buyers of Anthropic’s planned listing are discussing a valuation as low as $1.1 trillion, down from about $2 trillion floated in early October.

OpenAI has also pushed back its own listing. The company had suggested it could go public this year but delayed those plans, and it is now expected to list at some point in 2027, according to TechCrunch.

The latest round adds to a string of massive deals this year. In February, OpenAI raised $110 billion at a $730 billion pre-money valuation, with Amazon committing $50 billion and Nvidia and SoftBank each pledging $30 billion.

Billionaires.Africa reported in September that OpenAI was considering a funding round that would value it at $1.2 trillion ahead of a potential public offering.

Altman, who co-founded OpenAI in 2015, has said he holds no direct equity in the company. His fortune comes largely from early investments in startups such as Stripe, Reddit and nuclear energy company Helion.

As a result, the new valuation cements OpenAI’s position as one of the world’s most valuable private companies, even as investors take a more cautious view of AI pricing.