OpenAI’s Fundraising Efforts Sputter and Stall as Investors Refuse to Keep Cutting Checks
Futurism ·
"That’s OK, we are running our own race." The post OpenAI’s Fundraising Efforts Sputter and Stall as Investors Refuse to Keep Cutting Checks appeared first on Futurism .
Anthropic officially filed to go public to the tune of up to $2 trillion dollars last week. The news served as the latest litmus test of how far investors are willing to go as fears of a major financial market reckoning continue to haunt chipmakers and hyperscalers.
Sam Altman’s OpenAI, on the other hand, announced over the summer that it was putting off its own IPO until next year at the earliest, with managers telling staffers not to worry if Anthropic beats it to the punch.
“There is a chance they pull the cover off that confidential file in the coming weeks and become public in September,” CFO Sarah Friar told employees in August. “That’s OK, we are running our own race.”
However, keeping up the momentum has clearly proven far more difficult than anticipated. As the Wall Street Journal reported on Monday, OpenAI only managed to raise less than half of the $30 billion it was originally targeting for its latest funding round — a major departure from the seemingly limitless appetite for AI.
The news perfectly highlights the current mood on Wall Street after Big Tech companies including Google, Amazon and Intel were hit with major sell offs. Investors are once again asking serious questions about the industry’s ability to eventually right the ship after taking on staggering amounts of debt and showing little evidence of a road to profitability.
Following its lukewarm round of funding, OpenAI is now estimated to be valued at $1.25 trillion, well short of its aim of $1.4 trillion. That also puts it firmly behind Anthropic, setting the stage for what could be an ugly and drawn out scramble for market share. It’s an outcome that would’ve been impossible to predict a mere three years ago, when ChatGPT quickly established itself as the clear — albeit early — frontrunner in the AI race.
The Altman-led company is now rushing to grow its revenues to keep up with the Claude maker, which has been successfully luring in enterprise customers with its AI coding tools.
But the numbers paint a damning picture. Per the WSJ , Anthropic doubled its revenue between the first and second quarter of this year, while OpenAI only grew sales by 18 percent, to $6.7 billion.
Still, it’s not over for Altman. OpenAI tried to undercut its competition by lowering its prices earlier this year, a decision that’s reportedly starting to pay off .
More on OpenAI: Sam Altman to Infuriated Mathematicians: The Math Slop Won’t Stop
The post OpenAI’s Fundraising Efforts Sputter and Stall as Investors Refuse to Keep Cutting Checks appeared first on Futurism .