❯ OpenAI lowers its fundraising target to about $20 billion at a proposed $1.25 trillion valuation

A smaller targetOpenAI is seeking approximately $20 billion at a $1.25 trillion valuation, down from a previous plan for $30 billion at $1.4 trillion. Reuters, carried by AOL, attributes the figures to the Financial Times. Some investors have reduced commitments, and the first close is expected to fall below $20 billion. The round remains in progress.

Competing for overlapping investorsThe ChatGPT developer had been trying to secure commitments before Anthropic’s expected public-market debut in mid-November, with both frontier-model companies drawing on an overlapping investor base. The adjustment also comes during a U.S. technology selloff and renewed scrutiny of large AI spending commitments. OpenAI did not immediately respond to Reuters’ request for comment.

A tougher market for fundraisingReuters reports that the Nasdaq fell 2.9% on Friday and stood 7.8% below its October 6 closing high. OpenAI had set Friday as the deadline for investor commitments, but some investors reduced their planned allocations. With model training, compute purchases and service operations requiring continuing investment, changes to the round’s size and price add uncertainty to its fundraising plans.

▮ SIGNALReduced investor commitments are pushing OpenAI to adjust both the size and price of its round, showing how capital supply can constrain frontier-model expansion.