OpenAI is feeling the market's new mood too. According to a Financial Times report cited by CoinDesk, the ChatGPT maker now seeks to raise about $20 billion at a $1.25 trillion valuation. In late September Bloomberg reported that it aimed to raise at least $30 billion at a valuation of about $1.4 trillion.
Still a huge valuation
Even after the cut, it is one of the highest valuations in the world for a private company. In its previous round OpenAI raised about $122 billion at an $852 billion valuation. So even in the more modest scenario its value would rise by tens of percent. The company has not formally responded to the report, and details could change.
Why now
According to the report, the decision comes against the backdrop of sharp declines in AI stocks in recent weeks. Alphabet fell about 10% after announcing more than $300 billion of spending next year, Amazon fell despite impressive cloud growth, and Nvidia lost its title as the world's most valuable company. Investors are no longer willing to pay any price for promises.
And Anthropic
The report comes days after Anthropic, OpenAI's big rival, filed to go public. For investors, the question is how the two companies will be valued when the market is no longer euphoric. OpenAI, which spends tens of billions on computing power, needs the money to stay in the race.
