AI News
OpenAI Cuts Its Funding Target to $20 Billion as AI Stocks Slide, FT Reports
OpenAI has cut the target for its latest fundraising round from $30 billion to about $20 billion, the Financial Times reported on Friday, October 30, citing people familiar with the matter. Its desired valuation fell with it, from $1.4 trillion to $1.25 trillion.
The cut lands in the middle of a sharp AI-led sell-off. The Nasdaq fell 2.9% on Friday and is down 7.8% from its October 6 record close, according to Reuters, while the Nasdaq 100 fell 3.5% on Friday. OpenAI had set a Friday deadline for investors to commit to the round, but the first close is expected to bring in less than $20 billion after some investors reduced their allocations, the FT said.
Who is in the round
A consortium of investors from the United Arab Emirates, including the state-backed technology fund MGX, is expected to be the largest participant, the FT said. As part of the deal, OpenAI would gain the option to lease newly built computing capacity in the region. SoftBank and the venture firms Sequoia Capital, Coatue Management, Founders Fund and Andreessen Horowitz are also expected to take part, and wealthy individuals would be offered a later retail tranche at the same $1.25 trillion valuation.
None of this is confirmed by the companies. OpenAI, Sequoia, Founders Fund and SoftBank declined to comment, the FT said, and MGX, Coatue and Andreessen Horowitz did not immediately respond to requests for comment.
Why the timing matters
OpenAI raised $122 billion in March at an $852 billion post-money valuation, and it is seeking fresh capital to fund its computing ambitions as it prepares for a potential public listing of its own in 2027, according to the report. It is also keen to close this round ahead of Anthropic’s expected public listing in mid-November, since the two companies are tapping a similar investor base. DigestX covered the original $30 billion plan earlier this month, when the $1.4 trillion target was still the ambition.
What is confirmed and what is not
Keep the status plain. What is confirmed is the reporting: the Financial Times reported the cut, and Reuters and Bloomberg coverage matches it. What is not confirmed is the final size of the round, which may land below $20 billion, or the valuation, which no company has confirmed. One piece of context keeps the cut in proportion: $1.25 trillion would still be nearly 50% above the $852 billion valuation from March. OpenAI has lowered its ambition, not its worth.