OpenAI scales back its funding target

OpenAI has cut the target for its latest funding round to USD 20 bn, down from the USD 30 bn it was said to be looking for just days earlier, the Financial Times reports. A group of UAE investors will lead the round, the FT says. So far OpenAI has raised USD 11 bn, after a “tepid” response from some big investors, the Wall Street Journal reports.

OpenAI has also cut the valuation at which it’s looking to raise, the FT adds. It is now targeting a USD 1.25 tn valuation, down from USD 1.5 tn.

It’s not just OpenAI: Investors are getting pickier about AI across the board, the Journal reports. Lenders are demanding tougher terms, and AI cloud companies such as CoreWeave and Nebius have effectively been shut out of the bond market in recent weeks.

MEANWHILE- Big Tech is spending a bit less than expected. Microsoft and Alphabet both spent less than analysts expected last quarter, CNBC reports. Microsoft cut its full-year spending forecast to USD 170 bn from USD 175 bn.