OpenAI is seeking $20 billion in its latest funding round, $10 billion less than its previous target, at a reported $1.25 trillion valuation, Reuters reported on 30 October, citing a Financial Times account based on people with knowledge of the matter. The reported change concerns the amount the AI company is trying to raise from investors.
Key points
- OpenAI’s reported fundraising target is $20 billion, down $10 billion from the $30 billion previously reported by Reuters.
- The reported valuation is $1.25 trillion, following a reduction from a $1.4 trillion asking price on 22 October.
- The proposed round had not been signed as of 23 October, when its final size was still under discussion.
OpenAI’s $20 billion target
Reuters had previously reported that OpenAI was aiming to raise $30 billion at a $1.4 trillion valuation. Its 30 October account put the revised fundraising target at $20 billion, while attributing that figure and the $1.25 trillion valuation to the Financial Times. The Financial Times based its account on people with knowledge of the matter.
The target is the amount OpenAI is seeking in the proposed transaction. The valuation is the price being sought for the company. An account published before the latest fundraising report placed the valuation change on 22 October, when the proposed size of the round was still being discussed.
AI Affairs had earlier reported that OpenAI held talks about a $30 billion round with BlackRock and UAE funds. Its previous account of the transaction also described OpenAI’s effort to obtain signatures by 30 October for a round of up to $30 billion.
The $1.25 trillion asking price
OpenAI reportedly lowered the valuation it was asking of new investors to $1.25 trillion on 22 October, from $1.4 trillion earlier that month, Yahoo Finance reported on 23 October. The account described both figures as pre-money asking prices, which value a company before the proceeds of a new investment are received.
Yahoo Finance put the reduction in the asking price at $150 billion and reported resistance from some investors. It said no reason for the lower valuation had been reported. AI Affairs had also covered the reduction in OpenAI’s valuation target from $1.4 trillion to $1.25 trillion.
Earlier in October, OpenAI had pitched the $1.4 trillion figure to potential backers including BlackRock and UAE fund MGX, according to Yahoo Finance. That account described the proposed funding as a bridge ahead of a possible initial public offering. It identified investors from the United Arab Emirates and Coatue as prospective leaders of a round then described as worth up to $30 billion.
Signatures sought by 30 October
As of 23 October, the proposed round had not been signed and its final size remained under discussion, Yahoo Finance reported. OpenAI had told investors on 22 October that it aimed to obtain signatures by 30 October. The account also reported that OpenAI was negotiating a separate purchase of additional computing capacity from the UAE.
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