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OpenAI cuts fundraising target by $10 billion, valuation lowered to $1.25 trillion
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OpenAI has lowered its latest funding round target by $10 billion and is racing to finalize the deal, according to the Financial Times. The ChatGPT developer had originally planned to raise $30 billion at a $1.4 trillion valuation, pitching it as investors' last chance to buy in before a planned IPO next year, citing rapid revenue growth since July to justify nearly doubling its prior $852 billion valuation. But a sharp selloff in publicly traded AI stocks and growing concerns over the scale and pace of AI spending have clouded the round, compounded by the upcoming listing of rival Anthropic. OpenAI now seeks about $20 billion at a $1.25 trillion valuation, with an investor subscription deadline set for last Friday. People familiar with the matter said the first close is expected to come in below $20 billion as some investors have reduced their commitments.
Source report
October 31 — According to a report by the Financial Times, OpenAI has lowered the target size of its latest funding round by $10 billion and is racing to finalize the deal. The round has been overshadowed by a sell-off in AI-related stocks on public markets and the impending listing of its largest competitor, Anthropic.
Original Plans
Last month, OpenAI — the developer of ChatGPT — had planned to raise $30 billion at a valuation of $1.4 trillion, pitching the deal as investors' last opportunity to buy into the company before its IPO next year. At the time, OpenAI justified a valuation nearly double its previous $852 billion mark by citing rapid revenue growth since July.
Revised Expectations
As tech stocks suffered a sharp sell-off and concerns mounted over the scale and pace of AI spending, OpenAI began to lower its fundraising expectations. Multiple people familiar with the matter said OpenAI is now seeking to raise approximately $20 billion at a valuation of $1.25 trillion.
Subscription Deadline and First Close
OpenAI set a deadline of last Friday for investors to subscribe. The people said the amount raised in the first close is expected to fall below $20 billion, as some investors have reduced their subscription amounts.
Source
domesticNeutral / independent
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OpenAI cuts funding target by $10 billion to $20 billion at $1.25 trillion valuation