OpenAI's target valuation lowered to $1.25 trillion, funding target cut to $20 billion
OpenAI has lowered the target valuation for this funding round from $1.4 trillion to $1.25 trillion, a reduction of $150 billion, or about 10.7%; the funding target has also been cut from $30 billion to $20 billion, a reduction of $10 billion. People familiar with the matter said that because some investors reduced their subscription amounts, the actual funds raised in the first closing are expected to be less than $20 billion. MGX, part of a consortium of UAE investment institutions, is expected to become the largest participant, while Founders Fund, Coatue, Sequoia Capital, Andreessen Horowitz and SoftBank also plan to participate.
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The original text provides the specific figures for the dual cuts to OpenAI's valuation and funding target, along with the list of investors, which can be used to observe changes in the financing environment for AI companies.
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Over the weekend in the AI world, it felt like nothing but bad news. After tech stocks plunged overnight, the wind has completely shifted. Let's take a look together at the news of OpenAI's valuation and funding being cut.
On October 31, it was learned that OpenAI's target valuation was lowered by $150 billion, a reduction of about 10.7%.
Original target valuation: $1.4 trillion
Latest target valuation: $1.25 trillion
Valuation shrinkage: $150 billion (about RMB 1.06 trillion)
Reduction: 10.7%
More noteworthy is that OpenAI's fundraising target has also shrunk significantly. It originally planned to raise $30 billion, but has now lowered that to $20 billion, a cut of $10 billion, or 33.3%.
Specifically, under the dual pressure of a selloff in AI stocks and rival Anthropic's upcoming listing, OpenAI has lowered its fundraising target for this round by $10 billion, and its effort to secure investor subscription commitments is facing greater challenges.
Last month, the ChatGPT developer originally planned to raise $30 billion at a $1.4 trillion valuation and pitched the deal as investors' last chance to get in before the company launches an initial public offering (IPO) next year.
OpenAI said at the time that its revenue had grown rapidly since July, which supported its valuation and nearly doubled the company's valuation from the previous $852 billion.
But as tech stocks suffered a sharp selloff and market concerns about the scale and pace of AI spending intensified, OpenAI has lowered its fundraising target. On Friday, the tech-heavy Nasdaq 100 index fell 3.5%.
People familiar with the matter said OpenAI is now seeking to raise about $20 billion at a $1.25 trillion valuation. The company set Friday as the deadline for investors' funding commitments in this round. Due to some investors lowering their subscription amounts, the first close is expected to actually raise less than $20 billion, the people said.
A consortium of investment institutions from the UAE is expected to be the largest participant in this round, including the state-backed technology investment fund MGX. As part of the deal, OpenAI will also receive an option to rent newly built computing resources in the region.
Several venture capital firms, including Founders Fund, Coatue, Sequoia Capital, Andreessen Horowitz, and Masayoshi Son's SoftBank, also plan to participate in this round, the people said.
A financing arrangement for individual investors will also be launched later, giving high-net-worth individuals a chance to invest in OpenAI at a $1.25 trillion valuation. This arrangement is expected to expand the total size of this round to about $20 billion.
In March this year, OpenAI had just completed $122 billion in financing. But at the same time, the company plans to spend several times that amount on computing power to train and run its AI models.
(Source: China Fund News) Middle of the article Embedded advertisement