OpenAI is looking to raise up to $20 billion in its latest funding round. That is $10 billion less than the roughly $30 billion it first targeted, CNBC and the Financial Times reported.
The Financial Times said the round values the ChatGPT maker at $1.25 trillion post-money. The earlier target valuation was $1.4 trillion, a cut of $150 billion.
The round has not closed, and a person familiar with the deal told CNBC the figures could still change. OpenAI did not immediately respond to a request for comment.
OpenAI set a Friday deadline for investors to commit. Some backers chose to reduce their allocations, so the first close is expected to bring in less than $20 billion.
Investors from the United Arab Emirates are leading the round alongside Coatue. That group includes the state-backed tech fund MGX.
Who Is Putting Money In
The UAE group is expected to provide the largest share of the funding. The deal would also give OpenAI the option to lease newly built computing capacity in the region.
Other venture firms expected to take part include Founders Fund, Sequoia Capital and Andreessen Horowitz. The list reads like a who’s who of Silicon Valley money.
OpenAI is also racing the clock. Rival Anthropic is expected to make its stock market debut soon, and both companies are chasing a similar pool of investors.
A Rough Week for AI Stocks
The timing is awkward. The Nasdaq 100 dropped 3.46% on Friday as investors questioned whether huge AI spending will pay off.
Intel (INTC) fell 25% on weak revenue guidance. Micron (MU) slid 5.5%, and Nvidia (NVDA) lost 4%.
Microsoft (MSFT), Alphabet (GOOGL) and Amazon (AMZN) have spent heavily on AI infrastructure in recent years. All three issued capital spending figures or forecasts last week that came in below analyst estimates.
Alphabet had its worst trading day ever on Thursday after search revenue missed expectations. Chief business officer Philipp Schindler said lower monetization in AI Mode played a part.
OpenAI is planning an IPO in 2027. If investors commit less than the revised goal, it could enter that year with less fresh capital than it wanted, even as its computing needs keep growing.
CNBC confirmed the lower $20 billion target on Saturday, and the round remains open.
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