OpenAI wanted $30 billion. Now it is asking for $20 billion, and the first closing is expected to bring in even less. The Financial Times broke the story late Friday, and the shift is bigger than the headline number: private money for AI is getting pickier, fast.
What changed in the round
The target valuation slid from $1.4 trillion to $1.25 trillion, a cut of about $150 billion. Some investors trimmed their planned amounts, according to people familiar with the process. Friday, October 30 was the deadline for them to confirm. The Wall Street Journal added that OpenAI has secured $11 billion so far and met a “tepid” response from some large investors. A later offering to wealthy individuals could close the gap to $20 billion.
The Gulf is holding the line. A group of Middle Eastern companies, including the UAE sovereign wealth fund MGX, is expected to lead. Andreessen Horowitz, Sequoia Capital and SoftBank have also been named.
OpenAI has announced nothing officially and did not respond to a request for comment outside business hours. Every figure here comes from people familiar with the matter.
Cheaper, but still richer than March
Context changes the picture. At the end of March, OpenAI closed a $122 billion round at an $852 billion valuation, with SoftBank, Amazon and Nvidia among the backers. At the end of September came reports of a bridge financing, standing in for an IPO, at about $1.4 trillion, with annual revenue run rate nearing $70 billion. Even after this week’s cut, $1.25 trillion is about 1.5 times the March mark. The price tag fell, but it is still higher than six months ago. A round pitched in September as driven by investor demand has lost a third of its size in a month.
A bad week to ask for money
Tech stocks took a beating. The Nasdaq Composite fell 2.9% on Friday to close at 25,437, which leaves it 7.8% under its record close on October 6. The Nasdaq 100 dropped 4.5% and is down about 10% in three weeks. Investors keep asking whether heavy spending on data centers and computing power will pay back.
Then there is Anthropic. The maker of Claude is reportedly targeting an IPO in mid-November, ahead of Thanksgiving, aiming to raise as much as $100 billion at a $1.5 trillion valuation. Both companies court the same institutional investors, and OpenAI had hoped to lock in commitments before Anthropic listed. OpenAI has already pushed its own listing plans back to 2027.
What’s changing is the questions, not the appetite. Watch this space for how Anthropic’s debut is received in mid-November: if buyers absorb a $100 billion raise, the money is still there, just more selective.
Sources
- Reports say OpenAI has lowered its fundraising target by about $10 billion. Checking the numbers to see if this is the 'end of the AI boom'｜技術をためす人
- OpenAI Slashes Funding Goal by $10 Billion as Tech Stocks Slide – CoinCentral
- OpenAI reportedly lowers funding target for new round | TechCrunch
Photo: Bank OZK / Unsplash (Unsplash License)
