OpenAI Targets $1.25 Trillion Valuation in $30 Billion Funding Round
OpenAI is seeking to raise approximately $30 billion in a new funding round, targeting a valuation of $1.25 trillion as negotiations enter their final stages, according to reports.
The ChatGPT maker has lowered its proposed valuation by $150 billion from the previously discussed $1.4 trillion, people involved in the talks said, requesting anonymity because the discussions are private. The fundraising negotiations remain ongoing, and the terms could change.
OpenAI most recently raised $122 billion in March at a valuation of $852 billion, including the funds raised. The latest fundraising effort reflects the company's continued need for capital to support its expansion and investments in artificial intelligence.
Coatue Management is in discussions to co-lead the latest funding round, according to reports.
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OpenAI has also held talks with several investment funds from the United Arab Emirates, as well as other firms, including BlackRock Inc., as per reports.
OpenAI declined to comment, while Coatue did not immediately respond to a request for comment. One person familiar with the discussions said the company expects to finalise investor commitments by the end of next week. CNBC earlier reported the targeted $1.25 trillion valuation.
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The fundraising comes amid growing scrutiny of technology companies' spending on artificial intelligence. Technology stocks declined this week after mixed quarterly earnings from companies including Meta Platforms Inc. and Tesla Inc. raised concerns among investors about whether heavy AI investments will generate sufficient returns.
Investors are also watching preparations for the anticipated initial public offering of OpenAI rival Anthropic PBC, which is expected next month. The market reception could influence investor sentiment towards major AI companies and their future funding prospects.
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OpenAI has postponed its own initial public offering until next year, citing a focus on AI safety efforts. The company is continuing to pursue private funding as it invests in developing and expanding its artificial intelligence technology.