OpenAI cuts funding target as AI stock selloff deepens

Overview

Updated 52 minutes ago

OpenAI told investors it would raise $30 billion at a $1.4 trillion valuation. On Friday it cut the target to about $20 billion and the price to $1.25 trillion, according to the Financial Times. The first close is expected to land below even that.

The cut lands in a week when the Nasdaq fell 2.9% and sat 7.8% below its October 6 high. OpenAI is racing to close before rival Anthropic lists in mid-November, and both are courting the same investors. A smaller round means less money for the computing capacity OpenAI says it needs.

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.

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.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Sam Altman

Chief executive, OpenAI

Leading the company's latest funding round

Masayoshi Son

Chief executive, SoftBank Group

Reported participant in OpenAI's round

Dario Amodei

Chief executive, Anthropic

Preparing a mid-November public listing

Organizations Involved

OpenAI

AI 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

AI company

Preparing a mid-November public listing

AI developer behind the Claude models and a direct OpenAI rival.

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.

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

Technology company

Existing OpenAI backer

Software giant and longtime OpenAI partner and investor.

Nvidia Corporation

Semiconductor company

Reported participant in OpenAI's round

Chip designer whose processors power most large AI models.

Timeline

March 2026 October 2026

6 events Latest: Today

Tap a bar to jump to that date

October 2026
First close expected below the new target
Today Funding

Investors trim allocations, and the first close is seen raising less than $20 billion.
Today
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%.
Yesterday
WSJ reports only about $11 billion committed
Funding

The Wall Street Journal says commitments trail the original $30 billion goal.
Yesterday
Nasdaq closes at a record high
Market

The tech-heavy index peaks before a selloff in AI-related stocks begins.
October 6th, 2026
OpenAI pitches a $1.4 trillion valuation
Funding

The company markets the round to private-wealth clients at the higher price.
October 2026
March 2026
OpenAI raises a reported $122 billion round
Funding

The company closes a large round to fund computing capacity, according to the Financial Times.
March 2026

Scenarios

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 fills the gap, which the Financial Times reported could lift the round to about $20 billion. The UAE consortium led by MGX is expected to anchor the deal.

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.

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.