OpenAI Cuts Fundraising Target by $10 Billion as AI Selloff Hits Private Markets

OpenAI has cut its latest fundraising target by $10 billion, from about $30 billion to about $20 billion, and lowered its valuation mark from $1.4 trillion to $1.25 trillion, according to reports from the Financial Times citing people with knowledge of the matter. The pullback, reported on Friday, October 31, is the clearest sign yet that the AI stock selloff shaking public markets has reached private fundraising too.

What the reports say

According to reports from The Hindu BusinessLine and The Manila Times, both citing the Financial Times, OpenAI set Friday as the deadline for investors to commit to the round, but the "first close" is expected to raise less than even the revised $20 billion after some investors reduced their allocations. Separately, The Wall Street Journal reported that about $11 billion had been committed against the original $30 billion ask — less than half. These figures are reported, not confirmed by OpenAI, and the company has not publicly commented on the round's size.

A consortium of investors from the United Arab Emirates, including the state-backed technology fund MGX, is expected to be the largest participant, with OpenAI gaining an option to lease newly developed computing capacity in the region as part of the deal. SoftBank and venture firms including Founders Fund, Coatue Management, Sequoia Capital and Andreessen Horowitz are also expected to participate, and wealthy individuals are to be offered a subsequent retail tranche at the same $1.25 trillion valuation. OpenAI, which raised $122 billion in March at an $852 billion post-money valuation, is seeking fresh capital to finance its vast computing ambitions — and, according to reports, was keen to close before rival Anthropic's imminent listing, since both companies are pitching the same pool of investors.

Why investors pulled back

The Financial Times attributes the trim to two forces: the AI-led market selloff and competition from Anthropic, which is preparing to go public in mid-November at a valuation reported at $1.5 trillion or more. Public markets set the mood: we covered Friday's selloff yesterday, when the Nasdaq fell 2.9 percent on fears about AI spending. When listed AI stocks fall, private investors ask harder questions about how much compute spending a company can justify — and OpenAI's spending plans are among the largest in the industry.

That context cuts both ways. Even trimmed, $1.25 trillion would make OpenAI the most valuable private company ever, and $20 billion is still an enormous round. The story is not that investors have abandoned OpenAI; it is that they are no longer willing to fund it at any price, on any timetable. A $10 billion cut and a $150 billion valuation haircut, in a single month, is the market re-pricing risk in real time. The next test is the first close itself: if it lands well below $20 billion, the signal hardens. If the retail tranche and the MGX-led consortium fill the gap, OpenAI can present the trim as discipline rather than distress. Either way, the era in which an AI lab could name its price and watch investors compete to pay it appears, for now, to be over.