OpenAI is seeking to raise up to $20 billion in a new funding round, CNBC confirmed on Saturday, paring back its earlier target of up to $30 billion.
The funding round is still in progress and has not closed, so the figures are subject to change, a person directly familiar with the deal told CNBC, asking to remain unnamed as they were not authorized to discuss the details publicly.
OpenAI did not immediately respond to a request for comment.
The Financial Times first reported that OpenAI had reduced its target for the round by $10 billion, and said the company would seek a post-money valuation of $1.25 trillion. According to FT, the ChatGPT developer set a Friday deadline for investors to commit to the newest round, with some investors opting to reduce their allocations.
Investors from the United Arab Emirates are leading the round alongside Coatue, as CNBC previously reported.
News that the ChatGPT developer slashed its funding round follows a week when investors asked whether big tech firms' spending on AI, especially to build out data centers and snap up GPUs, will deliver adequate returns.
AI-linked stocks sank on Friday, with chip maker Intel down 25% on lackluster revenue guidance, Micron down 5.5%, and Nvidia falling 4%.
Microsoft , Alphabet's Google and Amazon have been on a spending blitz in recent years to meet the surge in demand for AI infrastructure, but all three issued capex figures or forecasts last week that came in below analysts' estimates.
Alphabet saw its worst trading day ever on Thursday after its search revenue fell short of expectations . Philipp Schindler, the company's chief business officer, said the impact on search was partly because of lower monetization within the company's AI Mode.
