OpenAI weighs pre-IPO funding round at valuations between $1.2tn and $1.5tn
New round would follow CEO Sam Altman ruling out a public listing in 2026, keeping OpenAI in private markets.
Briefing
- OpenAI is considering a new private funding round at a valuation of between $1.2 trillion and $1.5 trillion, extending its stay in private markets rather than pursuing a near-term IPO.
- The valuation range reported across sources varies materially: the Financial Times and Reuters cite $1.2 trillion while the New York Times reports up to $1.5 trillion, leaving the figure unresolved.
- The fundraising push follows CEO Sam Altman confirming that OpenAI does not plan to go public in 2026.
- The timing is linked to demand generated by recent model launches, which OpenAI is seeking to capitalise on for investor appetite.
- A successful close at the upper end of the range would make OpenAI one of the most valuable private companies ever, compressing the window for rival Anthropic to claim that distinction.
Analysis
- Anthropic's $2trn IPO valuation is directly undermined by OpenAI's pre-IPO round at $1.2-1.5trn: if OpenAI, with superior commercial scale, prices below $1.5trn in a private round, Anthropic's public market ask of $2trn faces a concrete comparable that roadshow investors will weaponize. The valuation gap implies Anthropic is pricing in a growth premium that its two-quarter adjusted operating profitability claim must fully justify, raising the probability of IPO price discovery below the $2trn target.
- A successful OpenAI close at $1.2-1.5trn at 10-year yields at 5% embeds a discount rate assumption that is structurally more punishing to long-duration private AI valuations than any prior funding round. Late-stage AI private market marks across the sector, including secondary OpenAI shares, must now be stress-tested against a 5% risk-free rate; any fund that marked positions to an anticipated 2026 IPO price faces concurrent pressure from both a delayed liquidity event and a higher discount rate compressing the terminal value.
- Bank of America's greater-than-10% Q3 investment banking fee decline, combined with OpenAI staying private and Anthropic's IPO still in roadshow preparation, removes two of the largest potential fee events from the 2026 underwriting pipeline. Goldman Sachs and Morgan Stanley, which had the Anthropic listing as a near-term catalyst for ECM fee recovery, now face a scenario where the most anticipated AI IPO slips further while BofA's flat trading guidance has already collapsed consensus H2 fee recovery assumptions.
Historical Context
- Jan 2025
OpenAI closed a $40bn funding round at a $300bn valuation. The current $1.2-1.5trn range implies roughly 4-5x appreciation in under 18 months, a compression of private market price discovery that has historically preceded IPO pricing disappointments when public investors apply stricter comparables.
- 2021
Rivian and other late-stage private companies raised capital at elevated valuations, then IPO'd into a rising rate environment where public market investors applied materially lower multiples. The mechanism: private round valuations set by growth-insensitive investors became anchors that public market pricing rejected, producing first-day or first-quarter collapses.
- 2019
WeWork's $47bn private valuation collapsed to zero when it attempted an IPO, partly because public investors had a comparable anchor in public real estate multiples. Anthropic's $2trn ask now faces an analogous dynamic with OpenAI's $1.2-1.5trn private comparable providing a hard reference point for roadshow pushback.
Connected Events
Anthropic selects Nasdaq for IPO targeting $2trn valuation
Anthropic's $2trn Nasdaq IPO target was disclosed the same week OpenAI's private round valuation of $1.2-1.5trn surfaced, creating a direct public comparable that institutional roadshow investors will use to pressure Anthropic's pricing.
Bank of America warns Q3 investment banking fees to fall more than 10%
Bank of America's guidance for greater-than-10% Q3 investment banking fee declines removes the fee recovery thesis that depended partly on large AI IPO underwriting mandates; OpenAI staying private through 2026 extends that headwind into 2027.
10-year Treasury yield hits highest level since 2007
The 10-year Treasury yield hitting 5% for the first time since 2007 mechanically raises the discount rate applied to OpenAI's distant cash flows, compressing the justified valuation range precisely as the company seeks to close a round at the top of that range.
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