OpenAI Cuts Funding Round Target to $20 Billion as Investors Turn Cautious, Reports Say

OpenAI has cut the target for its latest funding round to about $20 billion, down from the $30 billion it originally sought, according to reports from the Financial Times and The Wall Street Journal published on Friday. The ChatGPT maker has secured only about $11 billion in commitments so far, the Journal reported, less than half of the original goal, in what would be the first visible case of a flagship artificial intelligence mega-round being scaled back in mid-process.

The round values the company at $1.25 trillion, down from the roughly $1.4 trillion valuation discussed in September, according to the reports. OpenAI set Friday, October 31, as the deadline for investors to commit, but the first close is expected to come in below even the revised $20 billion target, because some investors reduced their allocations. OpenAI has not publicly confirmed the reported figures, and TechCrunch said it had contacted the company for comment.

What Changed in the Round

The shape of the round has shifted several times in a matter of weeks. Earlier in October, OpenAI was reportedly looking to raise around $30 billion at a valuation of $1.4 trillion. Bloomberg reported on October 22 that the valuation under discussion had moved to $1.25 trillion, a $150 billion drop, while the company still aimed for about $30 billion. The Financial Times then reported on Friday that the target itself had been cut to about $20 billion.

Even at the lower figure, the round would still be enormous. The $1.25 trillion valuation would make OpenAI the most valuable private company ever, up from the $852 billion post-money value of its $122 billion round in March. The money is being raised ahead of a planned initial public offering, and the round is led by a group of investors from the United Arab Emirates, the Financial Times said, with a consortium including the state-backed technology fund MGX expected to be the largest participant.

Other expected participants include Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz, according to the reports. To bridge the gap to the $20 billion target, OpenAI is considering a retail-style offering directed at family offices and wealthy private individuals at the same $1.25 trillion valuation, the Financial Times said.

The round values the company at $1.25 trillion, down from the roughly $1.4 trillion valuation discussed in September, according to the reports.

Why Investors Are Pulling Back

The Journal described the response from some large investors as tepid, and the timing helps explain why. The cut lands in the middle of a sharp sell-off in technology shares, as investors question whether the vast sums being spent on artificial intelligence infrastructure are generating returns quickly enough. The Nasdaq fell 2.9% on Friday and is down 7.8% from its October 6 record close, according to Reuters, in a week when market nerves around AI spending were on full display.

OpenAI is not the only AI company competing for capital. Anthropic is preparing to go public at a reported $1.5 trillion to $2 trillion valuation, possibly raising up to $100 billion, while Meta and Microsoft have both gone to public markets for money of their own. Meta plans up to $95 billion in stock sales to fund its AI buildout, and S&P moved its outlook on Meta to negative on October 30 over AI spending and negative free cash flow.

At the same time, the industry is being asked harder questions about trust and control. OpenAI, Google, Microsoft and Anthropic recently aligned on a single opt-out signal for publishers on AI training scraping, while Apple is bringing its AI features to China with Alibaba’s Qwen built in. The funding slowdown sits inside that wider reassessment, in which the technology is no longer being taken on faith alone.

• Original target: $30 billion at a $1.4 trillion valuation
• Revised target: about $20 billion at a $1.25 trillion valuation
• Committed so far: about $11 billion, according to The Wall Street Journal
• Round led by a UAE investor group, with a retail tranche for wealthy individuals planned
• First close expected below $20 billion, with more commitments expected in coming weeks

What the Cut Does and Does Not Mean

A smaller round is not the same as a failed one. Twenty billion dollars remains one of the largest private financings ever attempted, and the reports stress that more commitments are expected in the coming weeks, with the retail tranche still to come. The first close landing below the target would reflect reduced allocations from some investors, not a withdrawal of the round itself.

What the cut does signal is a change in bargaining power. For two years, leading AI companies have largely set their own terms, with investors competing for allocation. A flagship round being trimmed by a third, with its valuation cut by $150 billion along the way, suggests that investors are now pricing risk more carefully, even for the company behind ChatGPT.

It is also worth noting what is not yet known. OpenAI has not commented on the reports, and the final size of the round, the full investor list and the terms of the retail offering remain unconfirmed. Until the first close is announced, the $20 billion figure is a target, not a result.

What to Watch Next

What to watch next is simply what the article has already set out: whether the first close lands below $20 billion as reported, whether the planned retail offering brings the round up to its revised target, whether OpenAI comments publicly on the reported figures, and whether investor caution spreads to other AI financings in the coming weeks. Until confirmed updates arrive, the verified picture remains the one reported by the Financial Times and The Wall Street Journal: a $20 billion target, about $11 billion committed, and a $1.25 trillion valuation.