Key facts
- OpenAI's first close was expected to raise less than $20 billion after some investors reduced allocations, the FT reported.
- A consortium of UAE investors including state-backed technology fund MGX was expected to be the largest participant, per the FT.
- Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz were also expected to participate, according to the FT report.
- Wealthy individuals would have the option to invest in a subsequent retail offering at a $1.25 trillion valuation, the FT reported.
- OpenAI, MGX, Coatue, Sequoia Capital and Andreessen Horowitz did not immediately respond to Reuters requests for comment outside regular business hours.
OpenAI cut the target for its latest funding round by $10 billion to about $20 billion, the Financial Times reported on October 30, citing people with knowledge of the matter. The ChatGPT maker's desired valuation fell to $1.25 trillion from $1.4 trillion, the newspaper reported.
OpenAI set a Friday deadline for investors to commit, but the round's first close was expected to raise less than $20 billion after some investors reduced their allocations, the FT reported. A consortium of UAE investors that includes state-backed technology fund MGX was expected to be the largest participant, and as part of the deal OpenAI would gain the option to lease newly developed computing capacity in the region, according to the report.
Venture capital firms including Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz were also expected to participate, the FT reported. Wealthy individuals would have the option to invest in a subsequent retail offering at a $1.25 trillion valuation, it added.
OpenAI, MGX, Coatue, Sequoia Capital and Andreessen Horowitz did not immediately respond to Reuters requests for comment outside regular business hours, and Founders Fund could not be reached. The funding cut came as US tech stocks fell on worries about spending on AI: the Nasdaq dropped 2.9% on Friday and was 7.8% below its all-time closing high reached on October 6, Reuters reported.
OpenAI, which is pursuing a listing in 2027, has been keen to close the round partly to get ahead of Anthropic's listing, Reuters reported, saying the two companies are tapping a similar investor base.