OpenAI cuts funding target, aims for up to $20 billion in latest round

OpenAI is aiming to raise up to $20 billion in a new funding round, CNBC confirmed on Saturday, lowering its initial target of up to $30 billion.

The numbers are subject to change because the funding round is still ongoing and has not been completed, a person with direct knowledge of the deal told CNBC, speaking on condition of anonymity because he was not authorized to publicly discuss the details.

OpenAI did not immediately respond to a request for comment.

The Financial Times first reported that OpenAI had cut its target for this round by $10 billion, saying the company was seeking a post-money valuation of $1.25 trillion. According to the FT, ChatGPT developers set a Friday deadline for investors to commit to the latest round, with some investors choosing to reduce their allocations.

As previously reported by CNBC, investors from the United Arab Emirates are leading the round alongside Coatue.

News that the ChatGPT developer has cut its funding round comes a week after investors asked whether big tech companies’ AI spending, particularly building data centers and adding more GPUs, would provide enough return.

AI stocks fell along with chipmakers on Friday intel -25% decline due to lackluster earnings outlook; micron 5.5% decrease; Nvidia Down 4%.

microsoft, of the alphabet Google and Amazon Companies have ramped up spending in recent years to meet surging demand for AI infrastructure, but capital spending numbers and forecasts released last week were lower than analysts expected.

Alphabet had its worst trading day on Thursday as search revenue fell short of expectations. Philipp Schindler, the company’s chief business officer, said the impact on search was due in part to lower monetization within the company’s AI mode.