OpenAI cuts funding round target to $20 billion

OpenAI has reduced the target for its latest private funding round by $10 billion. It is now seeking about $20 billion at a $1.25 trillion valuation, the Financial Times reported late Friday, October 30, citing people familiar with the matter, according to Reuters. The ChatGPT maker had first aimed to raise $30 billion at a $1.4 trillion valuation. This is the second time in about a week that OpenAI has scaled back the deal, as a sell-off in AI stocks makes investors more cautious about the sector.centraloregondaily.com

A second cut in a week

The smaller target comes after a valuation cut. The Information noted that OpenAI had already lowered its valuation to $1.25 trillion last week before cutting the size of the raise. Bloomberg reported on October 22 that the company had moved the figure discussed in talks down by $150 billion from $1.4 trillion. According to Business Standard, which cited the FT, some investors had pushed back on the higher price. Morgan Stanley and Dragoneer had pitched that price to the bank's private wealth clients, and investors were given until October 30 to commit.theinformation.com+2

The round is being presented as an "opportunistic" bridge ahead of a possible initial public offering. Coatue and funds based in the United Arab Emirates are in talks to lead it, The Next Web reported. Even at the lower price, OpenAI would be valued well above the $852 billion it reached in March, when it raised $122 billion.thenextweb.com

Market turmoil weighs on the deal

The revised target landed at the end of a hard three weeks for AI stocks. The Nasdaq 100 has fallen about 10% since its record high on October 6, CoinDesk reported. On Friday the index fell 3.5%, its steepest drop since early June, as worries grew about whether AI will produce profits large enough to justify heavy, debt-funded spending, according to Bloomberg.coindesk.com+1

Friday's decline followed disappointing results this week. Intel shares fell 29%, and Amazon and Alphabet also dropped, Reuters reported. The Nasdaq Composite posted its worst month since March 2025.sacbee.com

Competition for capital

OpenAI is also competing with its rival Anthropic for investors' money. Anthropic filed its S-1 registration statement on Monday, October 26, and plans to list on the Nasdaq Global Select Market under the symbol "ANT." Its shares could start trading as soon as November 16, CNN reported. Deutsche Welle reported that the offering could raise as much as $100 billion, with analysts valuing the company at between $1.5 trillion and $2 trillion.us.cnn.com+2

OpenAI has pushed its own stock market debut back to 2027. The size of its private round still depends on how many investors are willing to buy in at $1.25 trillion before Anthropic sets its public price.