OpenAI Trims Valuation to $1.25 Trillion in $30 Billion Round as Hardware and Model Expansions Accelerate

Key Takeaways

• OpenAI is in the final stages of raising up to $30 billion at a $1.25 trillion pre-money valuation, down from the $1.4 trillion pitched to investors earlier in October。A full $30 billion raise would imply a post-money valuation of roughly $1.28 trillion.

• The round is being led by US venture firm Coatue and investors from the United Arab Emirates, with Abu Dhabi-based MGX among the UAE funds in talks to anchor the financing.

• Investors were given until October 30 to commit, and OpenAI may ultimately raise less than $30 billion depending on demand.

• The valuation cut follows weaker-than-expected client demand through Morgan Stanley’s private wealth channel, where one person described the response as “a bit of a thud” compared with prior OpenAI rounds.

• OpenAI has separately moved to diversify its compute supply, planning to purchase Google Tensor Processing Units (TPUs) and hiring engineers to optimize its frontier models for TPU hardware.

• The company is developing a new category of consumer hardware that CEO Sam Altman says is designed for AI, not for humans, and has a custom chip program with Broadcom—internally codenamed “Nexus”—covering 10 gigawatts of custom silicon deployment through 2029.

• GPT-6 and the new Intelligent UI began rolling out to all ChatGPT users on October 8, 2026, with GPT-6.1 Terra following on October 26.

OpenAI is close to finalizing a funding round of up to $30 billion at a $1.25 trillion pre-money valuation, led by Coatue and investors from the United Arab Emirates, after cutting its target by $150 billion when some investors balked at the earlier $1.4 trillion price。The round, which investors have until October 30 to commit to, comes as OpenAI simultaneously pursues Google TPUs, a new AI-native hardware device, custom Broadcom chips, and the global rollout of GPT-6—a multi-front expansion that explains why it needs the capital。

What Are the Final Terms of OpenAI’s $30 Billion Round?

OpenAI is seeking up to $30 billion at a $1.25 trillion pre-money valuation, with Coatue and UAE-based investors leading the round。That is down from the $1.4 trillion valuation Morgan Stanley and tech fund Dragoneer had floated to the bank’s private wealth clients earlier in October, according to documents seen by the Financial Times。The reduction of $150 billion reflects weaker demand than in prior OpenAI raises。

If the full $30 billion is committed, the post-money valuation would be approximately $1.28 trillion, which would make OpenAI the most valuable private company ever。The company has given prospective investors until October 30 to commit and may raise less than the full amount depending on interest。UAE funds, including Abu Dhabi-based MGX, have discussed putting in as much as $10 billion collectively as part of a syndicate, Bloomberg reported earlier in October, with BlackRock also in talks to participate。

Why Did OpenAI Cut Its Valuation Target?

OpenAI cut its valuation target because investor demand was materially weaker than in previous rounds, and because a broad sell-off in US tech stocks raised doubts about the economics of the AI infrastructure buildout。The FT reported that demand from Morgan Stanley’s private wealth clients was subdued: “There has been zero clamouring,” one person with knowledge of the process said. “All the prior times [OpenAI] have been on there’s been a frenzy. This time is a bit of a thud”.。

Two additional factors weighed on the round. Some investors were suffering from “indigestion” after committing heavily to prior OpenAI and Anthropic raises—OpenAI raised $40 billion in March 2025 and a record-breaking $122 billion in March 2026, while Anthropic has raised close to $100 billion this year。Other investors told the FT they would rather wait to see how Anthropic prices in its IPO before committing to its rival。

Is This Round a Bridge to an OpenAI IPO?

Yes—OpenAI is framing the $30 billion raise as a bridge to its own initial public offering, which is now expected in the first half of 2027, though no date has been fixed。OpenAI filed confidential paperwork for an IPO in June 2026, after its March 2026 raise valued the company at $852 billion post-money。

The timing matters for the broader AI IPO market. Anthropic publicly filed its S-1 on October 26, 2026, seeking a reported $1.5 trillion to $2 trillion valuation, and its debut is seen as a pricing benchmark for OpenAI。One investor quoted by the FT said the market “needs to see a successful IPO” because “these companies need funding”—a signal that private capital alone is nearing its limits for the largest AI labs。

What Is OpenAI Doing on the Hardware Front?

OpenAI is pursuing at least three hardware tracks simultaneously: buying Google TPUs, building a new consumer device, and designing custom chips with Broadcom。The common thread is a drive to reduce dependence on Nvidia GPUs for both training and inference, and to control the form factor through which AI reaches users。

Google TPU Purchase

OpenAI plans to purchase Google Tensor Processing Units, The Information reported on October 27, citing sources, and has posted job listings for engineers to optimize its frontier models for TPU hardware, welcoming candidates with either training or inference experience。No deal value or terms were disclosed. If completed, the purchase would mark a significant expansion of Google’s TPU business beyond its own cloud—Oracle announced on October 27 that it would offer Google TPUs in its cloud starting next year, the first time Google has supplied TPUs to a major external cloud provider。OpenAI’s relationship with Nvidia remains deep, however: Nvidia agreed in August to provide up to $105 billion in credit support for an Ohio data center project OpenAI will lease, and CEO Jensen Huang has said OpenAI’s Nvidia infrastructure commitments through 2030 represent roughly $600 billion in computing business for Nvidia。

New Consumer Hardware Device

OpenAI is developing a new category of consumer hardware designed around AI rather than around human interfaces。In an interview with Matthew Berman published on October 26, CEO Sam Altman said: “The reason we want to develop new kinds of hardware for consumers is that, in my opinion, this technology needs a new form factor. I really feel that. I think laptops and iPhones are incredible things... but I feel AI is constrained to use a device that was designed for a person, not for an artificial intelligence”.。Altman argued that it is “a little absurd” for an AI to consume energy rendering a human user interface and then read it back, rather than accessing data directly。

Broadcom Custom Chips (“Nexus”)

OpenAI and Broadcom are co-developing custom AI chips, and Broadcom has been seeking more than $50 billion in financing over recent weeks to fund the program, with Apollo and Blackstone among the lenders in early-stage talks。The internal project is codenamed “Nexus,” with first- and second-generation chips codenamed “Jalapeo” and “Serrano”.。The partnership covers 10 gigawatts of custom chip systems, with deployment planned from the second half of 2026 through the end of 2029。The financing could cover several gigawatts of OpenAI custom chip capacity and is expected to close by the end of the year。

What Capability Expansions Is OpenAI Rolling Out?

OpenAI is rolling out GPT-6 across ChatGPT, paired with a new “Intelligent UI” that lets the model answer with charts, diagrams, buttons, and input forms instead of plain text。GPT-6 and Intelligent UI began reaching all ChatGPT users, including free users, on October 8, 2026。OpenAI’s internal assessment says GPT-6 Instant begins responding about 44% faster than GPT-5.6 Instant on queries requiring web search。

The rollout continued on October 26 with GPT-6.1 Terra, available in ChatGPT Work and Codex for Plus, Pro, Business, Enterprise, and Edu plans, supporting visual reasoning, computer use, and writing。Notably, Terra does not support UAE inference residency—a restriction based on where inference runs rather than the user’s location, according to OpenAI’s release notes。The model cadence is accelerating alongside the capital raise: GPT-6 in early October, GPT-6.1 Terra in late October, and locked chats, ChatGPT Slides, and iCloud Mail/Calendar plugins all shipping within the same month。

Key Facts / At-a-Glance

• Round size: Up to $30 billion.

• Pre-money valuation: $1.25 trillion, down from $1.4 trillion pitched earlier in October.

• Implied post-money valuation: ~$1.28 trillion if fully subscribed.

• Lead investors: Coatue and UAE funds, including Abu Dhabi-based MGX; BlackRock in talks.

• Investor commitment deadline: October 30, 2026.

• IPO timeline: First half of 2027; confidential filing submitted June 2026.

• Hardware tracks: Google TPU purchases, new AI-native consumer device, Broadcom “Nexus” custom chips (10 GW through 2029).

• Model rollout: GPT-6 and Intelligent UI (October 8, 2026); GPT-6.1 Terra (October 26, 2026).