OpenAI slashes funding target by $10 billion amid tech rout, FT reports (Oct. 30)

(Corrects paragraph 2 in ‌Oct. 30 story ​to ​say earlier valuation target was $1.4 trillion, not $1.4 billion)

Oct 30 (Reuters) - OpenAI has slashed the target for its latest funding round by $10 ‌billion amid a selloff in tech stocks driven by AI ⁠worries, the Financial Times reported on Friday, citing people with knowledge of the matter.

The ChatGPT ‌maker is now seeking about $20 ‌billion and its desired valuation has dropped to $1.25 trillion from $1.4 trillion, the report said.

OpenAI set a Friday deadline for investors to commit ​to the funding round, but the "first close" is expected to raise less than $20 billion after some investors reduced their allocations, it added.

A consortium ⁠of UAE investors that includes state-backed technology fund MGX is expected to be the largest participant ​in the round, and as part of the deal, OpenAI would gain the option to lease newly developed computing ​capacity in the region, the newspaper added.

Venture ‌capital firms including Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz are also expected to participate, according to the ⁠report.

Wealthy individuals will have the option to invest in a subsequent retail offering at a $1.25 trillion valuation, the FT added.

OpenAI, MGX, Coatue, Sequoia Capital and Andreessen Horowitz ⁠did not immediately respond to Reuters requests for comment outside regular business hours. Founders ​Fund could not be reached for comment.

US tech stocks have suffered a rout amid growing worries over massive spending on AI. The tech-heavy Nasdaq index dropped 2.9% ‌on Friday and is down 7.8% from its all-time closing high reached on October 6.

OpenAI, which is pursuing a ‌listing in 2027, has been keen to close the funding round partly ⁠to get ahead of Anthropic's ‌imminent listing as the two ​are tapping a similar investor base, Reuters has reported.

(Reporting by Ananya Palyekar in Bengaluru; Editing by Tom Hogue and ‌Edwina Gibbs)

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