OpenAI has slashed the target for its latest funding round by $10 billion, now seeking $20 billion (about €18 billion) instead of the originally planned $30 billion. The company also lowered its valuation goal to $1.25 trillion, down from $1.4 trillion, according to The Financial Times.
The pullback signals mounting anxiety across the artificial intelligence sector. Investors who once competed aggressively for stakes in the ChatGPT maker now show reluctance as market conditions shift. Binding commitment deadlines passed Friday, and sources told the FT the first close could land below even the reduced target.
A consortium from the United Arab Emirates, including state-backed tech fund MGX, leads the investor group. In exchange, OpenAI gains the option to lease newly built computing capacity in the region. Venture capital firms Founders Fund, Coatue, Sequoia Capital, and Andreessen Horowitz plan to participate alongside Masayoshi Son’s SoftBank. Wealthy individuals will receive offers at the same valuation afterward, potentially bringing the round back to roughly $20 billion.
One backer told the newspaper the process launched during peak enthusiasm for AI stocks, then collided with a sharp market reversal. The Nasdaq Composite dropped 2.9 percent Friday after Alphabet, Amazon, and Intel disappointed investors.
For perspective: OpenAI raised $122 billion at an $852 billion valuation just seven months ago. The company needs vastly more capital for computing power, expecting to burn $278 billion in cash through 2030. Annualized revenue reached about $50 billion by September’s end, below the $68 billion to $70 billion investors had been told, partly because cloud partner revenue remains unbooked.
The stakes extend beyond OpenAI itself. Oracle signed a roughly $300 billion contract with the company while carrying $132 billion in net debt. CoreWeave holds $46 billion in net debt, and Nvidia maintains a $30 billion stake. If OpenAI cannot finance its computing orders, the entire supply chain suffers.
Competition for capital intensified as Anthropic prepares its own IPO, expected mid-November at a $1.5 trillion valuation. Both companies court the same institutional investors.
Still, even at $1.25 trillion, OpenAI would rank as history’s most valuable private company, and $20 billion remains among the largest funding rounds ever recorded.
