OpenAI, Anthropic valuations stoke correction fears in venture capital
Investor scrutiny is intensifying across the artificial intelligence startup market as some of the sector’s biggest fundraising efforts meet resistance on pricing. OpenAI trims its funding ambitions after pushback on valuation, adding to concern that private AI companies may be nearing a broader reset.
Highlights
- OpenAI reduces its target valuation to $1.25 trillion from $1.4 trillion and cuts its fundraising goal by about one-third amid investor pushback.
- OpenAI was last valued at $852 billion, with the revised round reflecting greater investor discipline as deal sizes and price expectations rise.
- Anthropic PBC pursues an IPO at a lower-than-expected $1.4 trillion valuation, intensifying fears of a broader correction in high-growth AI startup valuations.
Funding terms shift amid weaker market sentiment
As first reported by Bloomberg, OpenAI enters its latest fundraising talks in late September seeking at least $30 billion in new capital at a $1.4 trillion valuation after early discussions with interested backers.Some investors consider those terms too aggressive, according to people familiar with the matter who speak on condition of anonymity because the discussions are private. In response to that feedback, and to deteriorating market conditions, the ChatGPT maker lowers its target valuation to $1.25 trillion and reduces its funding goal by about one-third. The company declines to comment.
OpenAI has been one of the most successful startups in raising capital and was last valued at $852 billion. The latest revision suggests even the most prominent AI groups are facing tighter discipline from investors as deal sizes and price expectations climb.
Private market implications for AI startups
OpenAI’s smaller deal, together with rival Anthropic PBC’s move to pursue an IPO at a lower-than-expected $1.4 trillion valuation on a fully diluted basis, sends shockwaves through the venture capital market.The shift deepens concern in an industry already unsettled by a weeks-long public market selloff in AI stocks. Investors are increasingly questioning whether private company valuations can continue to outrun broader market sentiment, raising the prospect of a correction across high-growth startups.
Earlier, we looked at the AI stocks plunge as oil hit $110 a barrel, adding pressure on tech valuations.
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