OpenAI raises $11 billion, falling short of $30 billion target

OpenAI raised less than half of its $30 billion fundraising target in its latest round, securing about $11 billion so far, according to the Wall Street Journal. Earlier today we reported, citing the Financial Times, that the target had been cut to about $20 billion and that the first close was expected to fall below that figure. Its valuation landed at $1.25 trillion, short of the $1.4 trillion it had been aiming for. The shortfall reportedly reflects fading interest from major investors amid a tech sell-off tied to weak quarterly results from Google, Amazon, and Intel.

Funding plans

OpenAI now plans to raise up to $20 billion from family offices and high-net-worth individuals. The company is reportedly planning an IPO early next year.

Competition with Anthropic

Rival Anthropic has been growing revenue faster lately and could go public as early as November. A strong IPO could leave Anthropic with well over $100 billion in capital to weather any rough stretch ahead.

Market share battle

OpenAI has clawed back some market share recently, but the competition goes back and forth. OpenAI especially has been pushing hard with price cuts and more efficient models to hold its ground.

Earlier coverage: OpenAI cuts latest funding target by $10 billion amid tech rout, FT reports

Sources: The Decoder