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OpenAI cuts funding target as AI stock selloff deepens

OpenAI cuts funding target as AI stock selloff deepens

Money Moves

OpenAI is now seeking about $20 billion at a $1.25 trillion valuation, down from $30 billion at $1.4 trillion. Commitments reported so far are about $11 billion.

October 31st, 2026: First close expected below the new target

Overview

Updated Nov 1

The Financial Times reported on November 3 that OpenAI is seeking up to $20 billion at a $1.25 trillion valuation, about a third less than the $30 billion it first pitched. The round is still open, with roughly $11 billion in commitments, and the figures could change.

The cut follows a selloff in AI stocks. The Nasdaq fell 2.9% on October 30 and sat 7.8% below its October 6 record close. OpenAI's previous round closed on March 31 at an $852 billion valuation, and the company is trying to close this one before rival Anthropic lists in November.

Why it matters

OpenAI's valuation sets the price for the whole AI buildout. If it slips, the data centers, chips and power deals financed against it get repriced too.

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Key Indicators

$20B
New funding target
Down from $30 billion a month earlier.
$1.25T
Target valuation
Down from a $1.4 trillion pitch.
$10B
Size of the cut
Reduction from the original funding target.
$11B
Commitments secured
Reported by the Wall Street Journal before the first close.
$852B
Previous round valuation
The March 31 close, per the Financial Times.
2.9%
Nasdaq one-day drop
Friday's fall in the tech-heavy index.
7.8%
Nasdaq below October high
Distance from the October 6 record close.

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People Involved

Sam Altman
Sam Altman
Chief executive, OpenAI
Leading the company's latest funding round
 Masayoshi Son
Masayoshi Son
Chief executive, SoftBank Group
Reported participant in OpenAI's round
 Dario Amodei
Dario Amodei
Chief executive, Anthropic
Preparing a mid-November public listing

Organizations Involved

OpenAI
OpenAI
Artificial intelligence company
Raising about $20 billion at a $1.25 trillion valuation

Maker of ChatGPT and one of the most valuable private companies in the world.
Anthropic
Anthropic
AI company
Preparing a mid-November public listing

AI developer behind the Claude models and a direct OpenAI rival.
MGX
MGX
State-backed technology fund
Expected largest participant in OpenAI's round

Abu Dhabi fund that invests in artificial intelligence and advanced technology.
SoftBank Group Corp.
SoftBank Group Corp.
Conglomerate and investment holding, Tokyo Stock Exchange-listed
Reported participant in OpenAI's round

Japanese conglomerate and one of the world's largest technology investors.
Microsoft
Microsoft
Technology company
Existing OpenAI backer

Software giant and longtime OpenAI partner and investor.
Nvidia Corporation
Nvidia Corporation
Semiconductor company
Named in earlier coverage; participation not confirmed

Chip designer whose processors power most large AI models.

Timeline

March 2026 October 2026

8 events Latest: October 31st, 2026 · 1 week ago
Tap a bar to jump to that date

  1. First close expected below the new target

    Latest Funding

    Investors trim allocations, and the first close is seen raising less than $20 billion.

  2. WSJ reports OpenAI will approach family offices

    Funding

    The Wall Street Journal reported OpenAI plans to seek more commitments from family offices and wealthy individuals in the coming weeks.

  3. Anthropic files for a November listing

    IPO

    The Wall Street Journal reported Anthropic has filed paperwork for a public listing expected next month.

  4. OpenAI cuts target to $20 billion at $1.25 trillion

    Funding

    The Financial Times reports the reduced target and valuation as the Nasdaq falls 2.9%.

  5. WSJ reports only about $11 billion committed

    Funding

    The Wall Street Journal says commitments trail the original $30 billion goal.

  6. Nasdaq closes at a record high

    Market

    The tech-heavy index peaks before a selloff in AI-related stocks begins.

  7. OpenAI pitches a $1.4 trillion valuation

    Funding

    The company marketed the round to private-wealth clients at the higher price before the cut.

  8. Previous round closes at an $852 billion valuation

    Funding

    OpenAI's prior funding round closed on March 31 with the company valued at $852 billion, according to a Financial Times report. Earlier coverage put the amount raised in that round at about $122 billion.

Scenarios

1

OpenAI closes near $20 billion after retail offering

Likely Resolves by End of 2026

Discussed by: Financial Times, Reuters

The first close raises less than $20 billion as some investors trim allocations. A later retail offering to wealthy individuals at the $1.25 trillion valuation is an option the Financial Times reported. The reports do not say it would reach $20 billion. The UAE consortium led by MGX is expected to anchor the deal.

2

Round stalls near $11 billion

Possible Resolves by End of 2026

Discussed by: Wall Street Journal

The Wall Street Journal reported OpenAI had secured about $11 billion in commitments, well short of its initial $30 billion goal. If the retail offering fails to close the gap, OpenAI would have less capital for the computing capacity it says it needs. That could force it to slow data-center and chip commitments.

3

Anthropic's listing pulls capital from OpenAI

Uncertain Resolves by Nov 30, 2026

Discussed by: Reuters, Bloomberg

Anthropic is expected to list in mid-November at a valuation reported above $1.5 trillion. Both companies court the same investors. A strong Anthropic debut could pull demand away from OpenAI's round and push its pricing lower or delay the close into 2027.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

2019

WeWork's withdrawn IPO (2019)

WeWork's parent company tried to go public in 2019 at a valuation near $47 billion. Investors balked at its losses and governance, and the offering was pulled. Its valuation fell sharply, and SoftBank, its largest backer, took control and wrote down its investment.

Then

The offering was withdrawn and the chief executive resigned.

Now

The episode became a cautionary tale about private valuations meeting public markets.

Why this matters now

SoftBank is again a major backer, and OpenAI faces the same test of whether its private price survives contact with public markets.

2022

The 2022 technology selloff

As the Federal Reserve raised interest rates to fight inflation, investors sold growth stocks and cut funding for unprofitable technology companies. The Nasdaq fell through the year, and several high-profile startups slashed valuations and laid off staff.

Then

Funding rounds shrank and layoffs spread across the sector.

Now

Investors began demanding a path to profit, not just revenue growth.

Why this matters now

The current selloff echoes that shift, with OpenAI's widening losses now weighed against Anthropic's small operating profit.

Sources

(13)
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Reuters CNBC TV18 Financial Times Investing.com Bloomberg Law Investor's Business Daily upday News Seeking Alpha Folha de S.Paulo Business Recorder CNBC Builders in Fintech Investing.com