OpenAI Cuts Funding Target to $20 Billion

OpenAI has trimmed the target for its latest funding round to $20 billion, down from an earlier goal of $30 billion, CNBC confirmed on Saturday. A person with direct knowledge of the deal told CNBC the round has not closed and the terms could still move; the person spoke on condition of anonymity because they were not authorized to discuss the details publicly. OpenAI did not immediately reply to a request for comment, CNBC said. The Financial Times reported that OpenAI cut the round's target by $10 billion and would seek a post-money valuation of $1.25 trillion.

The Financial Times said people familiar with the matter had previously described a $30 billion raise at a $1.4 trillion valuation. OpenAI has cited a sharp revenue increase since July as support for nearly doubling its valuation from $852 billion. A consortium of UAE investment groups, among them state-backed technology fund MGX, is expected to be the largest participant; Founders Fund, Coatue, Sequoia Capital, Andreessen Horowitz and SoftBank also plan to take part, according to the FT. CNBC previously reported that UAE investors are leading the round together with Coatue. OpenAI raised $122 billion in March.

The pullback follows a week of investor questions about whether heavy tech spending on AI, especially data centers and GPUs, will produce adequate returns, CNBC reported. AI-linked shares fell on Friday: Intel dropped 25% after weak revenue guidance, Micron lost 5.5%, and Nvidia slid 4%, CNBC said. The Nasdaq 100 fell 3.5% on Friday and closed October down 6.65%, its worst month since March 2025, according to Stocktwits. Microsoft, Alphabet's Google and Amazon reported capital spending numbers or forecasts last week that missed analyst expectations, CNBC reported. Alphabet posted its worst trading day on record Thursday after search revenue disappointed; chief business officer Philipp Schindler said lower monetization within the company's AI Mode contributed to the miss.

The FT reported that OpenAI had set a Friday deadline for investor commitments, and the initial close was expected to fall short of $20 billion because some investors reduced their allocations. One OpenAI backer told the FT that the process "had begun amid enthusiasm for AI but was caught by a sharp reversal in the market." OpenAI is also competing for investor attention with Anthropic, which plans an IPO next month at a valuation of at least $1.5 trillion.