OpenAI cuts funding target by $10 billion after AI turmoil

OpenAI, the company behind ChatGPT, has had to make major adjustments to its plans to raise tens of billions of dollars. The turmoil in the stock market and growing doubts about the huge investments in artificial intelligence are making it increasingly difficult to convince investors.

According to the Financial Times, OpenAI has therefore reduced its funding target by $10 billion. The imminent IPO of competitor Anthropic also makes it harder to attract new money.

OpenAI is now trying to raise about $20 billion in its latest funding round. That is a significant reduction compared to last month, when the company was still expecting $30 billion.

The intended value of the company has also been adjusted downwards. According to the Financial Times, OpenAI is now aiming for a valuation of 1.25 trillion dollars, compared to 1.4 trillion dollars earlier. That's a difference of no less than $150 billion.

According to newspaper sources, some investors have lowered their financial commitments. This seems to make it more difficult for OpenAI to achieve the original objectives.

The setback comes at a time when investors are looking more and more critically at the huge amounts that technology companies are putting into AI. Companies are investing hundreds of billions of dollars in data centers and other facilities, but it is still uncertain when those investments will yield sufficient profits.

Those concerns were clearly visible on Wall Street on Friday. The Nasdaq 100, which includes many large technology companies, fell by about 3.5 percent.

In addition to the turmoil in the stock market, OpenAI is also facing stiff competition from Anthropic, the company behind AI assistant Claude.

According to the Financial Times, Anthropic is preparing to go public in November, with the company aiming for a valuation of at least $1.5 trillion.

This complicates the financing round of OpenAI. Both companies try to attract large investors, who therefore have to choose where to invest their money.

Nevertheless, OpenAI still seems to be able to count on considerable financial support. A group of investors from the United Arab Emirates, including the state-backed MGX, would like to invest the largest amount.

Japanese SoftBank and well-known investment companies such as Sequoia Capital, Coatue, Founders Fund and Andreessen Horowitz would also like to participate.

It is not yet known how much money these parties will ultimately make available. OpenAI has not confirmed the new amounts itself.

Despite the lower target, OpenAI continues to look for huge amounts of money. Developing and running advanced AI models is costing more and more.

Especially the data centers and powerful computer chips needed to support ChatGPT and other AI services require large investments.

In March, OpenAI already raised around 122 billion dollars. Still, the company needs funding again to pay for its ambitious expansion plans.

According to the Financial Times, OpenAI is also preparing for a possible IPO in 2027.

The latest developments show that even OpenAI cannot escape the growing caution among investors. While interest in AI remains high, it is becoming increasingly important for technology companies to demonstrate that their multi-billion dollar investments ultimately also generate enough money.