OpenAI struggles to raise $30B, DeepSeek raises $16B

OpenAI is struggling to close a targeted $30 billion funding round at a $1.4 trillion valuation. According to the Wall Street Journal, the company has secured approximately $11 billion in commitments so far, and at the previous valuation of $1.25 trillion rather than the target. This difficulty is attributed to capital scarcity, with 70% of US venture capital already concentrated in the four largest AI firms. Investors are reportedly preferring to exit or avoid further exposure, leading to a scenario described as "scraping the barrel" in the Gulf region.

In contrast, Chinese AI lab DeepSeek successfully raised $16 billion at a valuation of approximately $75 billion. Roughly a quarter of DeepSeek's funding is indirectly from the state. The disparity highlights differing capital environments, with DeepSeek leveraging state support to secure war chests for compute expansion. An analyst noted that the real news is that OpenAI is struggling to scrape together 11 billion, while DeepSeek quickly raised 16 billion. This view suggests that OpenAI's fundraising difficulties signal market saturation and risk aversion among VCs, while DeepSeek's access to state-backed capital poses a competitive threat in the compute race.