OpenAI's fundraising target slashed by $10 billion, valuation simultaneously cut to $1.25 trillion

Beating AI News Flash: According to a report by the UK's Financial Times, OpenAI has lowered the target size of its latest funding round by $10 billion and is now racing to finalize the deal.

Previously, a sell-off in AI concept stocks in public markets, combined with the impending listing of its largest competitor Anthropic, cast a shadow over this funding round. ChatGPT developer OpenAI originally planned last month to raise $30 billion at a $1.4 trillion valuation and marketed the deal as investors' last chance to take a stake in OpenAI before its IPO next year.

At the time, OpenAI cited rapid revenue growth since July to justify a valuation nearly double the previous $852 billion. But as tech stocks suffered a sharp sell-off and concerns mounted over the scale and pace of AI spending, OpenAI also began to lower its funding expectations.

Multiple people familiar with the matter said OpenAI is now seeking to raise about $20 billion at a $1.25 trillion valuation. OpenAI set a deadline of last Friday for investors to subscribe. The people said the first close is expected to raise less than $20 billion because some investors have already reduced their subscription amounts.