OpenAI cuts fundraising goal and is now seeking up to 20 billion
The short version
- The artificial intelligence developer is now seeking up to 20 billion instead.
- Investors from the United Arab Emirates are leading the new round.
- The funding round is still in progress and has not closed yet.
Why it matters to you. For your business, the cooling tech enthusiasm means Wall Street is finally asking hard questions about how fast these computer tools must pay for themselves.
OpenAI just lowered its fundraising target by 10 billion dollars, bringing its new goal to up to 20 billion. The ChatGPT developer set a Friday deadline for investors to commit to the newest round, with some backers opting to reduce their allocations, according to the Financial Times.
The funding round is still in progress and has not closed, so the final figures could still change. Investors from the United Arab Emirates are leading the round alongside Coatue, the investment firm. The pullback comes as investors question whether massive spending on artificial intelligence data centers and graphics chips will deliver adequate returns.
Chip maker Intel dropped 25 percent on Friday after issuing lackluster revenue guidance, while Micron fell 5.5 percent and Nvidia dropped 4 percent. Microsoft, Alphabet which owns Google, and Amazon have all been spending heavily in recent years on infrastructure to meet the surge in demand.
Alphabet saw its worst trading day ever on Thursday after search revenue missed expectations, with chief business officer Philipp Schindler pointing to lower monetization inside the company's artificial intelligence mode. Watch your software vendor bills as tech giants rethink their spending pace.
