OpenAI reduces funding round target by $10 billion amid tech-stock decline
OpenAI lowered its fundraising goal to about $20 billion, cutting the valuation target to $1.25 trillion as investors scale back amid a broader sell-off in technology shares.
OpenAI announced that it is now seeking roughly $20 billion in its latest funding round, down $10 billion from the amount originally targeted. The company’s desired valuation has been adjusted to $1.25 trillion, compared with the earlier $1.4 trillion figure.
The firm set a Friday deadline for investors to commit, but the initial close is expected to raise less than the $20 billion goal after some participants reduced their allocations. A consortium of investors from the United Arab Emirates, including the state-backed technology fund MGX, is expected to be the largest contributor. The agreement would give OpenAI the option to lease newly developed computing capacity in the region.
Venture-capital firms such as Foundry Fund, Coatue, Sequoia Capital and Andreessen Horowitz are also slated to take part, and wealthy individuals may invest in a subsequent retail offering at the $1.25 trillion valuation.
The funding move comes as U.S. technology stocks have fallen, with the Nasdaq index down 2.9 percent on Friday and 7.8 percent from its recent peak. OpenAI, which plans to pursue a public listing in 2027, is aiming to complete the round before competitor Anthropic, which is targeting a similar investor pool, proceeds with its own listing.