OpenAI Slashes Funding Round to $20B From $30B as Valuation Drops to $1.25T
Summary
OpenAI cut its funding round target by $10 billion to $20 billion, with the valuation dropping to $1.25 trillion from a prior $1.4 trillion target, per FT and Reuters reports. Sources say OpenAI may pull less than even the reduced $20 billion at Friday's commitment deadline as some investors trimmed allocations. The pullback comes as Anthropic's IPO competes for the same investor base and AI spending scrutiny intensifies — the Nasdaq fell 2.9% Friday and sits 7.8% below its October 6 record close, while S&P cut Meta's credit outlook to negative on AI-related leverage. A UAE consortium including MGX is expected to be the largest participant, alongside Andreessen Horowitz, Coatue, Founders Fund, Sequoia and SoftBank, with a retail round planned for high-net-worth investors. The smaller raise and softer demand mark a clear shift in private AI funding appetite and could pressure valuations across the sector.
This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Mint.