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OpenAI has reduced its latest fundraising target by $10 billion, lowering its goal from $30 billion to $20 billion as investors grow increasingly concerned about the enormous cost of artificial intelligence infrastructure, the Financial Times reported Oct. 30.
Valuation Adjusted as Investor Appetite Faces Pressure
The ChatGPT developer had initially sought to raise $30 billion, equivalent to about $40 billion in South Korean won at the exchange rate cited in the report. The revised target is approximately $20 billion, or 26.7 trillion won.
OpenAI had also raised its proposed company valuation from $852 billion to $1.4 trillion, citing sharply increased revenue since July. Its latest reported valuation has since been adjusted to $1.25 trillion, reflecting changing market conditions.
Initial Fundraising Round May Fall Short
OpenAI has promoted the fundraising campaign as investors' last opportunity to purchase an ownership stake before the company's planned initial public offering next year.
However, the company is reportedly unlikely to reach even its original target in the initial round. People familiar with the matter said OpenAI had set Oct. 30 as the deadline for initial investment commitments, but some investors reduced the amounts they were willing to contribute.
The company plans to make up the shortfall through additional fundraising from individual investors, with the ultimate goal of securing $20 billion.
AI Infrastructure Costs Remain a Major Challenge
Despite the lower fundraising target, OpenAI's demand for capital remains substantial. The company raised $122 billion through external investment in March this year. People familiar with its plans said spending on training and operating AI models is expected to reach several times that amount.
OpenAI is also competing with Anthropic for investor attention. Anthropic, another major AI developer, is preparing for a stock market listing next month and publicly filed its registration documents with the U.S. Securities and Exchange Commission on Oct. 26.
Wall Street Reassesses the Economics of AI Investment
Concerns about the scale and pace of AI infrastructure spending were reflected in U.S. stock market performance on Oct. 30. The Nasdaq Composite fell 747.73 points, or 2.86%, to close at 25,437.00. The Nasdaq 100, which tracks major technology companies, declined 3.46%.
Investor concerns about AI spending resurfaced after earnings reports and forward guidance from Amazon and Intel, following Alphabet, Google's parent company, failed to meet market expectations.
On Wall Street, investors are increasingly questioning whether the massive sums being committed by major technology companies to AI infrastructure will translate into sufficient financial returns and measurable productivity gains.
OpenAI's reduced fundraising target highlights a growing tension in the AI industry: companies continue to require extraordinary amounts of capital to develop and operate advanced models, while investors are demanding clearer evidence that the spending will produce sustainable returns.
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