OpenAI reportedly cuts funding goal to $20 billion as AI stocks slide

Two reports, two numbers: The FT said the first closing of the round, expected Friday, would come in under $20 billion after some investors trimmed how much they would put in. The Wall Street Journal reported OpenAI had about $11 billion in commitments toward an original $30 billion goal and planned to approach family offices and wealthy individuals. OpenAI, the investors and the UAE fund named below did not immediately comment, Reuters said.

Who is reportedly in: The largest investor is expected to be a United Arab Emirates group that includes the state-backed AI fund MGX, with an option for OpenAI to rent computing capacity in the UAE, the FT reported. Founders Fund, Coatue, Sequoia and Andreessen Horowitz are expected to take part, and wealthy individuals could join a later offering at the same $1.25 trillion valuation.

The market backdrop: The Nasdaq fell 2.9% on Friday and ended 7.8% below its Oct. 6 high, Reuters reported. The Journal also reported that rival Anthropic's second-quarter revenue more than doubled to $11.6 billion with a small operating profit, while OpenAI's revenue rose 18% to $6.7 billion and its losses widened, though OpenAI won back some customers after cutting prices.

The bull case: A $20 billion raise at $1.25 trillion would still be one of the largest private financings ever, and the reported investor list includes some of the best-known venture firms. OpenAI is preparing for a possible stock-market listing in 2027.

The bear case: A smaller round and a lower price than OpenAI sought, during a tech sell-off and with Anthropic's own public offering expected soon, suggest investors are pushing back on valuation.

Weak spot: Both sides lean on unconfirmed numbers. A cut target does not mean demand collapsed, since the Journal says OpenAI is still courting new investors, and the higher valuation hopes were also never confirmed by the company.

What's still unknown: The final size of the round, whether the UAE computing deal is signed, and whether OpenAI will confirm any of the figures.

Sourcing: the Financial Times (via Reuters and Bloomberg Law) and The Wall Street Journal (via Investing.com), Oct. 30–31. Both reports rely on people familiar with the talks, and the two outlets give different figures for how much has been raised; neither has been confirmed by OpenAI. Reuters' version of the FT story contains a typo listing the earlier valuation as "$1.4 billion"; the context makes clear it means $1.4 trillion. Photos are file images.