AI News · $100M+ rounds ·
OpenAI reportedly cuts funding target to $20 billion after tepid response
OpenAI has lowered the target for its latest funding round to $20 billion, the Financial Times reported, down from an earlier reported goal of $30 billion. The Wall Street Journal reported that OpenAI has secured $11 billion so far and that some large investors gave the effort a "tepid" response.
Key points
- The FT reported OpenAI cut its funding target to $20 billion, led by UAE investors.
- The WSJ reported OpenAI has secured $11 billion so far.
- Earlier reports put the raise at $30 billion ahead of a planned IPO.
What happened: OpenAI's latest funding round is falling short of earlier expectations, according to several news reports summarized by TechCrunch. The Financial Times reported on Friday that the company has lowered its funding target to $20 billion, and that a first close is expected to come in below that figure.
The details: According to the FT, the round will be led by a group of investors from the United Arab Emirates. A later retail offering aimed at wealthy individuals could bring the total up to the $20 billion target. The Wall Street Journal reported that OpenAI has secured $11 billion so far and that its fundraising met a "tepid" response from some large investors. The names of the investors and the valuation attached to the new target were not reported, and TechCrunch said it had contacted OpenAI for comment.
Background: OpenAI had previously been reported to be raising $30 billion at a $1.4 trillion valuation, and later at a $1.25 trillion valuation, ahead of a planned IPO. TechCrunch noted that the timing may be difficult, as Wall Street investors have grown wary of heavy AI infrastructure spending, which has contributed to a major sell-off in tech stocks. It added that Anthropic's planned IPO could also face challenges.
What to watch: Whether OpenAI completes the round, at what valuation, and how investor caution around AI spending affects the listing plans of the largest model providers.
Our take
Teams that depend on OpenAI should watch whether tighter funding changes pricing, product pace or infrastructure plans across the major AI vendors.