OpenAI has cut the target for its latest funding round from $30 billion to roughly $20 billion, according to a Financial Times report that circulated late Friday, in the clearest sign yet that this week's tech rout is reshaping the economics of the AI boom.
Reuters, Investing.com and The Economic Times were among the outlets citing the FT report, which said the ChatGPT developer lowered its goal by $10 billion as anxieties about AI spending mounted and technology stocks sold off. The revised round keeps the company's valuation target at roughly $1.25 trillion — itself already reduced from the $1.4 trillion discussed earlier this fall — though terms remain subject to change as OpenAI seeks commitments from investors. For more context on this story, see our ongoing more AI stories.
A Round Already Marked Down
The reduction caps a month of retrenchment for what would still be one of the largest private fundraisings in history. Earlier in October, reports from Bloomberg and the FT said OpenAI had lowered its valuation target to $1.25 trillion from $1.4 trillion after encountering resistance from prospective investors questioning the scale of spending required to build frontier models and the computing infrastructure behind them.
The company last raised $122 billion in March at an $852 billion valuation, according to the FT, and is seeking fresh capital ahead of a potential stock market listing that has been pushed to 2027. Coatue Management has been in talks to co-lead the round alongside investment funds based in the United Arab Emirates, and OpenAI has also discussed funding with BlackRock, according to earlier reporting. Investor commitments had been expected to be finalized by the end of October, with the FT previously noting the amount raised could fall short of the target if demand remained weaker than anticipated — a caveat that has now effectively become the plan.
The fresh capital is intended to serve as bridge financing ahead of a possible IPO, although the terms of the financing have not been finalized, and the round's shrinking size suggests even the industry's flagship company is not immune to the repricing underway in AI markets.
The Rout That Changed the Math
Timing is everything in fundraising, and OpenAI's timing just got worse. Friday delivered Wall Street's worst day since June, with the Nasdaq falling 2.86% to close at 25,437 and the S&P 500 dropping 1.82%, as earnings from Amazon and Intel spooked investors about the cost of the AI buildout.
The losses capped a brutal stretch: NBC News reported that tech stocks wiped out roughly $1 trillion in value this week as concerns deepened about the boom's sustainability, and CNN noted the Nasdaq just suffered its worst month in over a year. Amazon sank after its spending on AI infrastructure turned its free cash flow negative, while Intel plunged nearly 29%. The BBC framed the underlying anxiety succinctly — AI spending is approaching $1 trillion, and investors have begun asking whether the returns can justify it.
That is the environment into which OpenAI is asking investors to commit tens of billions of dollars. The FT characterized the sentiment shift as mounting anxieties about debt-financed AI infrastructure and volatility in technology stocks — precisely the two forces that defined the week's selloff.
Investor Anxiety Meets AI's Biggest Checkbook
The cut also arrives as the private AI funding cycle shows other signs of strain. Attention is turning to Anthropic's expected initial public offering, which could serve as the first real test of public-market appetite for AI companies and their enormous spending commitments, according to earlier reporting. OpenAI, for its part, has pushed its own expected debut into 2027, making this private round its principal source of new capital in the interim.
For investors, the question is no longer simply whether OpenAI's revenue is growing, but whether any company can earn an acceptable return on the hundreds of billions being committed to data centers, chips and power. This week's selloff suggests that question has moved from the margins to the mainstream.
What It Means for the AI Funding Cycle
Even at the reduced target, a $20 billion raise at a $1.25 trillion valuation would place OpenAI among the most valuable private companies in history — a point worth stressing. This is a trim, not a collapse.
But the direction of travel is what matters for the broader market. A funding target slashed by a third within a single month, at valuations marked down twice, signals that the era of unlimited AI fundraising at any price is pausing. If commitments come in below even the reduced $20 billion goal, the gap between AI's capital ambitions and investor appetite will have been measured in real time — and every other startup with a mega-round on the calendar will be recalibrating behind it.
OpenAI did not immediately comment on the FT report, and the final terms of the round remain subject to change.
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