OpenAI Cuts Funding Target by $10 Billion as AI Stock Crash Threatens $1.25 Trillion Valuation

OpenAI has reportedly lowered its fundraising goal from $30 billion to $20 billion. Its proposed company value has also dropped to $1.25 trillion from $1.4 trillion as investors rethink the risks of spending heavily on AI.

Key takeaways

• OpenAI has reportedly cut its fundraising target by $10 billion.
• Its proposed value has fallen from $1.4 trillion to $1.25 trillion.
• A major drop in AI stocks is making investors less willing to provide funding.

OpenAI has reportedly cut its latest fundraising target by $10 billion. The move comes as a sharp fall in artificial intelligence stocks makes investors less willing to pay for the industry's huge plans to build computing infrastructure.

According to an October 30 Reuters report, which cited the Financial Times, the company behind ChatGPT is now looking to raise about $20 billion instead of $30 billion. Its proposed value has also fallen from $1.4 trillion to $1.25 trillion.

The change comes as investors question whether AI companies can earn enough money to justify the hundreds of billions of dollars being spent on computing infrastructure.

OpenAI Cuts Funding Plans as Investors Reduce Their Contributions

OpenAI first aimed to raise $30 billion in new funding to support its growth and prepare for a possible stock market listing in 2027.

However, some investors reportedly lowered the amounts they planned to contribute before the Friday deadline for making commitments.

People familiar with the talks say the first closing of the funding round is now expected to bring in less than the revised $20 billion target.

A group of investors from the United Arab Emirates is expected to make the largest contribution. The group includes MGX, a technology investment fund backed by the government.

Under the proposed deal, OpenAI could also receive the option to rent newly built computing capacity in the region.

Other possible investors reportedly include Founders Fund, Coatue Management, Sequoia Capital and Andreessen Horowitz.

The new fundraising target follows an earlier drop in the company's proposed value.

Coinpaper reported on October 23 that OpenAI's value had fallen by about $150 billion, from $1.4 trillion to $1.25 trillion.

The latest news suggests that investors' concerns are affecting not only the price of OpenAI shares but also the amount of money the company can raise.

However, the funding terms are still being discussed. OpenAI has not publicly confirmed that it has completed a funding deal at the reported value.

AI Stock Crash Raises Questions About OpenAI's Computing Costs

OpenAI's fundraising problems come during one of the biggest technology stock selloffs of 2026.

The Nasdaq Composite fell about 2.9% on October 30. It is now 7.8% below the record closing level it reached on October 6.

Investors are becoming more worried about the huge amounts of money needed to build AI data centers, buy advanced computer chips and secure enough electricity.

These concerns have also affected companies that provide equipment and services to OpenAI and its competitors.

Amazon recently reported that its free cash flow over the previous 12 months fell from a positive $14.8 billion to a negative $42.4 billion, even though its cloud business continued to grow strongly.

Coinpaper's Amazon analysis explained how spending on infrastructure can use up cash faster than profitable businesses can bring it in.

Meanwhile, S&P Global Ratings changed Meta's credit outlook to negative. The agency warned that Meta's growing AI investments could lead to a large cash flow shortfall.

The agency's $71 billion forecast shows how pressure from AI spending is starting to affect credit ratings, not just stock prices.

For OpenAI, finding affordable computing power remains important for training and running more advanced AI models.

Anthropic's IPO Adds Pressure to OpenAI's Fundraising

OpenAI also faces growing competition for investor money from Anthropic, the company that makes Claude.

Anthropic filed public paperwork for a Nasdaq stock market listing on October 26. The filing showed strong revenue growth, along with large operating and accounting losses.

Coinpaper's Anthropic IPO coverage explained that the company reported a net loss of $80.7 billion in the first half of the year. Much of this loss came from accounting costs that did not involve actual cash payments.

The company could begin trading in November. This would give investors another way to invest in the fast-growing AI market.

OpenAI has reportedly been trying to finish its funding round before Anthropic's expected stock market debut. Both companies are competing for money from many of the same large investors.