OpenAI cuts its fundraising target by $10 billion to about $20 billion

OpenAI has cut the target for its latest fundraising round by $10 billion and is now seeking about $20 billion at a $1.25 trillion valuation.

Last month, the company had been aiming to raise $30 billion at a $1.4 trillion valuation. Its previous valuation was $852 billion.

OpenAI told prospective backers that the deal represented their last opportunity to invest before its IPO next year. It cited rapid revenue growth since July in support of the valuation increase.

The company set last Friday as the deadline for investors to commit. The first close is expected to raise less than $20 billion, after some investors reduced their commitments.

The round has unfolded as AI-related shares have sold off in public markets. Tech stocks also suffered a sharp sell-off.

OpenAI is also seeking investor money as Anthropic prepares to list. Anthropic has been described as OpenAI’s biggest rival.

The final amount raised in the first close remains unclear. The identities of investors that cut their commitments, and the size of those reductions, have not been disclosed.

OpenAI has not set out the specific revenue figures it used to support the valuation, and the timing of its IPO remains unknown. It is also unclear whether the company will seek further closes for the round.