THE ESSENTIALS IN 30 SECONDS

  • The Financial Times reported on October 30 that OpenAI now aims to raise about $20 billion, down from roughly $30 billion, with investors from the United Arab Emirates leading.
  • A later offering aimed at wealthy individuals could help close the gap; the Wall Street Journal reported that $11 billion has been secured so far.
  • The move follows an earlier reported cut in the valuation target from $1.4 trillion to $1.25 trillion and comes during a sharp sell-off in tech stocks.

OpenAI has scaled back the size of its latest fundraising, according to a Financial Times report published late on Friday, October 30. The company is now said to be targeting about $20 billion, a third less than the roughly $30 billion it had been seeking. None of the figures below have been confirmed by OpenAI; TechCrunch said it had asked the company for comment, and no response was included in its coverage.

What has been reported

Per the FT, as summarised by TechCrunch and CoinDesk, the round would be led by a group of investors from the United Arab Emirates. The first close is expected to come in below the new target, and OpenAI could later open a retail offering for wealthy individuals to reach the full amount. CoinDesk reports that the $20 billion would be raised at a $1.25 trillion valuation.

The Wall Street Journal added that OpenAI has so far secured $11 billion and that some large investors had given the fundraising a "tepid" reception, according to TechCrunch.

A target that has moved twice

In September, OpenAI was reported to be seeking about $30 billion at a $1.4 trillion valuation. Last week, the FT and Bloomberg reported that the company had lowered that valuation to $1.25 trillion after pushback from some investors, a reduction Bloomberg put at $150 billion. At that stage CNBC reported that UAE investors would lead alongside Coatue, and Bloomberg said OpenAI had also held talks with Abu Dhabi's MGX and with BlackRock, The Next Web noted.

OpenAI's last raise, in March, brought in $122 billion at an $852 billion valuation, according to The Next Web. The round under discussion has been presented as a bridge towards a public listing; OpenAI filed confidentially with the US Securities and Exchange Commission in June but has not set a date.

Market context

The reported cut comes as investors reassess heavy spending on AI infrastructure. CoinDesk notes that the Nasdaq 100 had fallen about 10% from its October 6 record, including a 4.5% drop on Friday. OpenAI is also competing for capital with Anthropic, which, CoinDesk reports, plans to go public in November. A smaller round would not in itself signal trouble for OpenAI's operations, but it suggests that appetite for private AI deals at trillion-dollar valuations has limits, at least for now.