Even OpenAI feels AI doubt: valuation $150 billion down

OpenAI, the company behind ChatGPT, has lowered its target valuation by as much as $150 billion. The company is trying to raise tens of billions of dollars from investors, but is now aiming for a lower valuation than before.

The striking step comes at a time when investors are looking more and more critically at the huge investments in artificial intelligence.

According to Bloomberg, OpenAI wants to raise about $30 billion during a new investment round. The company aims for a valuation of 1.25 trillion dollars, or 1250 billion dollars.

Earlier, a valuation of 1.4 trillion dollars was discussed during the negotiations. That amount has now been reduced by 150 billion dollars, a decrease of almost eleven percent.

According to insiders, the conversations are in the final phase. OpenAI hopes that investors will make their commitments definitive by the end of next week at the latest. The conditions may still change until then.

Despite the reduction, OpenAI would still be worth considerably more than in the previous investment round. In March, the company raised $122 billion at a valuation of $852 billion.

With a valuation of 1.25 trillion dollars, OpenAI would therefore be worth about 47 percent more than seven months ago.

Among the potential investors is Coatue Management, which is holding talks to play a leading role in the new financing round.

Various investment funds from the United Arab Emirates are also involved in the negotiations. In addition, asset manager BlackRock has previously been mentioned as a possible participant.

OpenAI has not confirmed the reporting and does not want to comment on the ongoing conversations.

The new funding should give the company additional scope to further develop its AI models and expand the necessary infrastructure.

This requires huge investments in data centers, powerful chips and electricity. At the same time, there is growing demand among investors as to whether AI companies can eventually recoup their high valuations and expenses.

The lower valuation of OpenAI comes after a restless week on Wall Street. Technology shares were under pressure after quarterly figures from Meta Platforms and Tesla, among others.

Investors are particularly concerned about the size of AI investments. Large technology companies are investing hundreds of billions of dollars in new infrastructure, while it is still uncertain when that expenditure will yield sufficient profits.

According to the Financial Times, there is less interest in OpenAI's new investment round than with previous financing. Some investors would have become more cautious after the huge amounts already invested in the AI sector.

The upcoming IPO of competitor Anthropic will also be closely monitored. That company is expected to go public next month. Receiving that IPO can become an important gauge of investor confidence in AI companies.

In the meantime, OpenAI has postponed its own IPO until 2027. The company says it wants to focus on the further development and security of its AI technology for the time being.

For the time being, the new investment round must first be completed. If the negotiations succeed, OpenAI will once again raise tens of billions of dollars, but at a significantly lower valuation than was discussed a few weeks ago.