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OpenAI has reduced the target for its latest funding round by $10 billion, cutting its goal from $30 billion to approximately $20 billion. The move follows a sharp selloff in technology stocks driven by growing investor concerns about artificial intelligence spending. The Financial Times first reported the development, citing people familiar with the matter.
Valuation Drops as Investor Appetite Cools
Along with the lower funding target, OpenAI’s desired valuation has also fallen. The ChatGPT developer now seeks a valuation of $1.25 trillion, down from an earlier target of $1.4 trillion. The company set a Friday deadline for investors to commit to the round.
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However, the initial “first close” of the round looks set to raise less than $20 billion. Some investors have already reduced their allocations, adding further pressure to the fundraising effort.
UAE Consortium Expected to Lead the Round
A consortium of UAE-based investors is expected to be the largest participant in the funding round. The group includes MGX, a state-backed technology fund. As part of the arrangement, OpenAI would gain the option to lease newly developed computing capacity in the region.
Several prominent venture capital firms are also expected to join the round. These include Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz, according to the Financial Times report. In addition, wealthy individuals will have the option to invest through a subsequent retail offering at the $1.25 trillion valuation.
OpenAI, MGX, Coatue, Sequoia Capital and Andreessen Horowitz did not respond to requests for comment outside regular business hours. Founders Fund could not be reached for comment.
Tech Stocks Under Pressure
The funding cut reflects broader turbulence in technology markets. US tech stocks have faced significant selling pressure as investors grow increasingly worried about massive AI-related spending. The Nasdaq index fell 2.9% on Friday alone and sits 7.8% below its all-time closing high, which it reached on October 6.
Meanwhile, OpenAI is also racing to close the round ahead of a competing move by rival AI company Anthropic. Reuters previously reported that OpenAI wants to secure the funding before Anthropic’s imminent market listing, as both companies draw from a similar pool of investors. OpenAI itself is targeting a public listing in 2027.
