OpenAI Cuts Fundraising Target to $20 Billion as AI Investors Turn Cautious

OpenAI has cut the target for its latest fundraising round from about $30 billion to $20 billion, according to reports from the Financial Times and the Wall Street Journal, in the clearest sign yet that investors are growing more cautious about the price of the artificial intelligence boom.

The ChatGPT maker had set Friday, October 30, as the deadline for investors to commit to the round. By that point, some backers had reduced the size of their planned investments, and the first closing is now expected to come in below even the revised $20 billion target, the reports said. OpenAI has not publicly commented on the figures, and the final size of the round could still change.

The revised target also comes with a lower valuation. OpenAI is now seeking a post-money valuation of about $1.25 trillion, down from the $1.4 trillion discussed in September, according to the Financial Times, as reported by CNBC. That is still an extraordinary figure for a company founded a little over a decade ago, but the $150 billion reduction is a measure of how quickly sentiment has shifted in recent weeks.

What the reports say

The Wall Street Journal reported that OpenAI had secured roughly $11 billion by the commitment deadline, less than half of the original $30 billion goal, with some large investors responding coolly. CNBC confirmed the Financial Times report that the target had been cut to $20 billion. A group of investors from the United Arab Emirates, including the state-backed technology fund MGX, is expected to provide the largest share of the new money.

Major venture firms including Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz are also expected to take part, according to the reports, and wealthy individuals may later be offered a chance to invest at the same valuation. The round is not closed, and none of the reported participants has confirmed its commitment publicly.

Context matters here. OpenAI raised $122 billion in March 2026, according to the Financial Times, in a round that closed at an $852 billion post-money valuation. The company is not short of cash to operate. What has changed is the terms on which new money is available, and how much of it investors are willing to commit at once.

Why investors are pulling back

The fundraising cut lands in the middle of a sharp sell-off in technology stocks. The Nasdaq 100 fell 3.46 percent on Friday, and is down about 10 percent over the past three weeks, as investors question whether the enormous spending on AI infrastructure can deliver returns fast enough to justify current valuations.

That doubt is not confined to OpenAI. Google, Meta, Amazon and Microsoft together spent about $207 billion on AI-related capital expenditure in the third quarter of 2026, more than double the equivalent period a year earlier, and have guided toward hundreds of billions more. Last week, S&P cut its outlook on Meta to negative, citing AI spending and negative free cash flow. Alphabet, Google’s parent, lost about $500 billion in market value in a single session after its results.

For OpenAI, the arithmetic is stark. Reports citing an internal investor document put its projected cumulative free cash flow deficit for 2026 to 2030 at about $278 billion, while compute and data-centre agreements signed over the past 15 months carry a stated total value of more than $1.4 trillion. Those commitments are bets on future demand for AI services that, for now, remains unproven at that scale.

The Anthropic race

Timing is also a factor. OpenAI moved quickly to secure commitments before its closest rival, Anthropic, launches its planned initial public offering in mid-November 2026. Anthropic disclosed its IPO documents this week and is targeting a valuation of at least $1.5 trillion, according to reports. Both companies are competing for the same pool of investor capital, and a weaker-than-expected OpenAI round could influence how that listing is priced.

OpenAI filed confidentially for its own IPO in June 2026, according to earlier reporting, so the valuation set in this private round will be watched as a marker for any future public listing. A $1.25 trillion valuation would still make it one of the most valuable private companies in the world, but it is no longer the $1.4 trillion figure investors were discussing only weeks ago.

What happens next

Three things will determine whether this is a pause or a turning point. The first is the size of the first close: if it lands well below $20 billion, the gap between ambition and appetite will be hard to ignore. The second is Anthropic’s IPO pricing in November, which will test whether public markets are any more forgiving than private investors. The third is evidence that AI spending is converting into durable revenue, rather than simply funding larger models and more data centres.

None of that means the AI boom is over. Demand for AI services continues to grow, and the largest technology companies are still committing vast sums to infrastructure. What the cut does show is that the era in which investors would fund almost any AI plan at almost any price is, for now, over. The next phase will be judged on returns, not just on scale.

Frequently asked questions

How much is OpenAI now trying to raise?
About $20 billion, down from an original target of roughly $30 billion, according to the Financial Times and the Wall Street Journal.

What valuation is OpenAI seeking?
A post-money valuation of about $1.25 trillion, down from $1.4 trillion discussed in September.

How much has been committed so far?
The Wall Street Journal reported about $11 billion had been secured by the October 30 deadline, though the round has not closed and the figure could change.

Who is leading the round?
A group of investors from the United Arab Emirates, including the state-backed fund MGX, is expected to provide the largest share, alongside firms such as Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz.

Has OpenAI confirmed the cut?
No. OpenAI has not publicly commented on the reported figures, and the reports rely on people familiar with the deal.

Sources: Financial Times reporting via CNBC and TipRanks; Wall Street Journal reporting via TechCrunch; Business Standard on Big Tech AI capital expenditure. All figures are as reported by those outlets and have not been confirmed by OpenAI.