OpenAI cuts funding round target from $30 billion to $20 billion

The amount of money OpenAI is asking investors for has come down by one third. The Financial Times reported on Friday that the firm has cut the target of its new funding round. The new target is $20 billion. The earlier target was $30 billion. TechCrunch covered the FT story on the same day.

TechCrunch's Anthony Ha wrote that OpenAI has already secured about $11 billion of the smaller $20 billion target. A first close is expected below that level. A later retail offering to wealthy individuals could lift the total to the full $20 billion.

What has already moved

The reported company valuation has stepped down twice. OpenAI first sought money at a $1.4 trillion valuation. It later sought the round at $1.25 trillion. TechCrunch did not name the new valuation that goes with the lower $20 billion target. Each step is a signal, from the firm or its backers, that the earlier figure did not clear.

Who is in the round

The FT's reporting is that investors from the United Arab Emirates will lead the round, TechCrunch wrote. The FT did not name those investors. TechCrunch did not either. A retail offering is being prepared for wealthy individuals, who would come in after the first close.

What OpenAI said

OpenAI has not confirmed or denied the figures. TechCrunch wrote that it had asked the firm for comment and had not received one. The $11 billion figure is a report. OpenAI has not published it as an audited number itself.

The last public step in this round was eight days ago. On 22 October, press reports said OpenAI was aiming for a $30 billion raise at a $1.25 trillion valuation. UAE investors were in the lead group then too. The new reporting is that both figures have moved down.

What this changes for a team buying from OpenAI

OpenAI's own model prices and the amount of compute behind them rest on this money. The smaller target means a smaller amount of cash for the firm's data-centre build. Other large AI firms are also raising less than they first asked for this quarter.

A buyer picking an AI vendor for the next twelve months of work should know this. The useful question is how OpenAI pays for the compute and data-centre deals already reported by the press. A first close of $11 billion is much smaller than the earlier $30 billion target. If a supplier is paid slowly, the end buyer can feel it as slower response times from the product.

Source

• "OpenAI reportedly lowers funding target for new round," TechCrunch, Anthony Ha