OpenAI cuts funding target by $10 billion as AI sell-off bites

OpenAI has cut the target for its latest funding round by $10 billion, to about $20 billion, after a sell-off in technology shares driven by worries about artificial intelligence, the Financial Times reported on Friday 30 October. The maker of ChatGPT had been seeking $30 billion.

The newspaper also reported that OpenAI’s desired valuation has fallen to $1.25 trillion, from $1.4 trillion. Friday was the deadline for investors to commit, but the first close was expected to raise less than $20 billion after some investors reduced their allocations.

The Wall Street Journal reported separately that only about $11 billion had been committed by the deadline — less than half of the original $30 billion target. OpenAI did not immediately respond to requests for comment, Reuters reported.

A consortium of investors from the United Arab Emirates, including the state-backed technology fund MGX, is expected to be the largest participant. As part of the deal, OpenAI would gain the option to lease newly built computing capacity in the region. Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz are also expected to take part, and wealthy individuals would be offered a chance to invest later in a retail offering at the same valuation.

Why it matters

The cut is a clear sign that investor enthusiasm for artificial intelligence is cooling. OpenAI is one of the most closely watched companies in the sector, and a smaller round at a lower valuation suggests investors are becoming more careful about the price they will pay, even for the company behind ChatGPT.

It also matters because OpenAI needs huge sums to pay for the computing power behind its models. The lower valuation would still be well above the $852 billion post-money value of its funding round in March, but the gap between what OpenAI hoped to raise and what investors have so far committed shows the funding is no longer a formality.

What happens next

OpenAI is expected to keep raising money in the coming weeks, and the first close of the round is still to be completed. The company is pursuing a stock market listing in 2027, and Reuters has reported it has been keen to close this round before rival Anthropic’s expected public listing, since the two are competing for many of the same investors. The next thing to watch is whether commitments grow beyond the $11 billion reported so far.

This article is for general information and education only. It is not legal or financial advice.

Sources

• https://wixx.com/2026/10/30/openai-cuts-funding-target-by-10-billion-ft-reports/ (Reuters, 30 October 2026)
• https://www.thehindubusinessline.com/info-tech/openai-funding-target-cut-by-10-billion-as-ai-slumps/article71648520.ece (The Hindu BusinessLine, 31 October 2026)
• https://dealroom.co/news/168544-openai-has-only-about-11b-committed-after-cutting-its-round-target-by-10/ (Dealroom, 31 October 2026)