OpenAI cuts private funding target to $20 billion at $1.25 trillion valuation
OpenAI has reduced its fundraising goal from $30 billion to up to $20 billion, reflecting weaker demand as it awaits Anthropic's IPO pricing.
According to reports by CNBC and the Financial Times, US artificial intelligence company OpenAI has lowered its target for its ongoing private funding round to as much as $20 billion, down from the previously sought $30 billion. The company maintains a valuation target of $1.25 trillion. The round is being led by investors from the United Arab Emirates and venture firm Coatue.
The reduction was first reported by the Financial Times, which noted that OpenAI gave investors until October 30 to commit, with some choosing to reduce their allocations. Reuters, citing the FT, reported that the first close is expected to bring in less than $20 billion. CNBC confirmed the new target on October 31, noting that the round remains open and final numbers could still change.
This adjustment comes amid a broader sell-off in technology stocks driven by concerns over the return on massive AI capital expenditures. Intel dropped 25% after weak guidance, and Nvidia fell 4%, while Microsoft, Alphabet, and Amazon reported capital spending below analyst expectations. In this context, OpenAI’s decision to lower its target suggests investor hesitation about committing large sums before seeing how public markets value rival Anthropic, which filed its prospectus on October 26 for a Nasdaq listing under the ticker ANT.
OpenAI’s annualized revenue was approximately $50 billion at the end of September, according to Bloomberg, with projections reaching at least $70 billion by the end of 2026. At a $1.25 trillion valuation, this implies a price-to-sales ratio of roughly 25 times current revenue run-rate. The company confidentially filed its own IPO prospectus with the U.S. Securities and Exchange Commission in June but has not disclosed a debut date.