OpenAI cuts its funding target by $10B as AI stocks slide

OpenAI is asking investors for less money than it planned. The Financial Times reported on October 30 that the ChatGPT maker cut its funding target by $10 billion. The new goal is about $20 billion. The paper cited people with knowledge of the matter. At that price, the whole company would be valued at $1.25 trillion.

A funding round is when a company sells shares to investors for cash. A lower target usually means investors were less eager than hoped. Bloomberg's account of the FT report points to two causes. One is a selloff in AI stocks. The other is Anthropic's coming public listing, which sells its shares on a stock exchange. That suggests the two rivals are drawing on the same pool of investor money. Reports differ on what valuation OpenAI sought before, so we are not stating one.

Keep reading — what to watch

Will OpenAI still raise the full $20 billion? Watch whether investors commit at the $1.25 trillion price or push it lower. Watch, too, how Anthropic's listing is received. A strong debut could ease the pressure on OpenAI, and a weak one could add to it.