OpenAI cuts funding target to $20 billion at lower valuation
According to the Financial Times, OpenAI, the company behind ChatGPT, has cut its funding target. The new round now aims to raise about $20 billion instead of $30 billion, at a valuation of about $1.25 trillion, down from $1.4 trillion. The round was pitched to investors as a 'last chance' to buy in before a possible IPO next year.
The Nasdaq 100 index fell 3.5% this Friday as tech stocks slid. Markets are worried about huge AI spending, and investors are taking a fresh look at when AI infrastructure will pay off. Some backers have lowered their pledges, so the first close may come in below $20 billion.
A UAE state-backed tech fund, MGX, is expected to lead the round as the biggest backer, with Sequoia and SoftBank also planning to join. Rival Anthropic is set to go public next month at a value that could top $1.5 trillion, drawing lots of investor money. OpenAI still plans to spend huge sums on model training and computing power.
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