OpenAI cuts funding target by $10 billion, FT reports
OpenAI has decreased its fundraising target by $10 billion to $20 billion, lowering its proposed valuation to $1.25 trillion, according to the Financial Times. The AI company had initially sought $30 billion at a valuation of $1.4 trillion. The deadline for investors to commit to the financing round was set for Friday, although the initial closing is likely to fall short of the revised target.
Some investors have reduced their planned allocations, reflecting growing concerns over AI spending. The reduced valuation represents a $150 billion decrease from OpenAI's initial target, indicating a more cautious investment climate for AI companies. This move comes as OpenAI and Anthropic vie for capital from the same pool of institutional investors.
The fundraising effort is timed to beat Anthropic's anticipated stock market listing, which could heighten competition for funds. The move also aligns with a decline in U.S. technology stocks, with the Nasdaq Composite falling 2.9% on Friday.
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