OpenAI Cuts Funding Target to About $20 Billion and Valuation Goal to $1.25 Trillion, FT Reports

Since OpenAI closed a $122 billion round at an $852 billion valuation in March 2026, the numbers it has chased have grown fast. On Friday, Oct. 30, the Financial Times, citing people with knowledge of the matter, reported that the company slashed the target of its latest round by $10 billion.

OpenAI is now seeking about $20 billion at a $1.25 trillion valuation. Last month the plan was $30 billion at $1.4 trillion, according to the FT. The $1.4 trillion figure was the one floated to private wealth clients in mid-October.

Investors faced a Friday deadline to commit. The FT reported that the "first close" is expected to raise less than $20 billion because some investors trimmed their allocations. OpenAI, MGX, Coatue, Sequoia Capital and Andreessen Horowitz did not respond to Reuters requests for comment outside business hours. Founders Fund could not be reached.

Who is writing the checks

A consortium of UAE investors, including the state-backed technology fund MGX, is expected to be the largest participant, the FT reported. As part of the deal, OpenAI would get the option to lease newly developed computing capacity in the region.

Founders Fund, Coatue, Sequoia and Andreessen Horowitz are also expected to take part. Wealthy individuals will get a chance to invest in a later retail offering at the same $1.25 trillion valuation.

A report published Oct. 22 had described the round as an "opportunistic" bridge to an IPO, with UAE investors and Coatue in front. That report said OpenAI confidentially filed its prospectus with the SEC in June and has not said when it will list. Another report said Sam Altman told Fortune that OpenAI will not go public this year. The company is pursuing a 2027 listing.

A rough tape for AI

The Nasdaq fell 2.9% on Friday and sits 7.8% below its record close of Oct. 6, Reuters reported. The selloff is tied to worries about the scale of AI spending.

One outlet reported that chipmakers lost roughly $2 trillion in market value in early October. Another reported that Alphabet lost around $700 billion in value after raising its 2026 capital spending guidance to $195 billion to $205 billion and warning 2027 would be higher. Both figures come from single accounts.

The FT reported earlier in October that OpenAI's annualized revenue run rate was close to $50 billion at the end of September. Figures of nearly $70 billion had circulated earlier in the year. OpenAI has not disputed that it is on pace for $70 billion in annualized revenue by the end of 2026.

There is a debt angle too. SoftBank's five-year credit default swaps jumped to about 384.6 basis points, the highest since 2023, according to Startup Fortune's tally. Bloomberg estimates SoftBank faces a funding gap of at least $20 billion as it refinances a $40 billion bridge loan tied to its $64.6 billion OpenAI stake.

The Anthropic factor

Reuters has reported that OpenAI wanted to close this round partly to get ahead of Anthropic's imminent listing, because the two are tapping a similar pool of investors. One outlet reported that some investors want to see how Anthropic's IPO performs before writing another check. That claim comes from a single account.

Anthropic raised $65 billion in May at a $965 billion valuation, according to the Oct. 22 report. That report said people familiar with the plans expect an offering that could value it at $1.5 trillion to $2 trillion.

Broadcom's Anthropic exposure shows the other side of the ledger. Four banks and asset managers announced a roughly $63 billion special-purpose financing vehicle to fund Anthropic's lease of Broadcom custom AI chips. On its last earnings call, Broadcom CEO Hock Tan said Anthropic is on track to become its largest custom-chip customer in 2027. Broadcom's CFO said the company may provide modest residual value guarantees, and management named no cap on the exposure. Morningstar said the deal lines up with its bullish forecast.

The case that this is just a reset

OpenAI's own pitch last month leaned on growth. The company cited rapid revenue growth since July to justify a valuation nearly double its prior $852 billion mark, according to the FT. The new $1.25 trillion target remains well above that March mark; one outlet put the increase at approximately 50%.

Altman has said publicly that AI is in a bubble, comparing it to the dot-com era. He has also promised OpenAI will keep spending aggressively. In February, OpenAI told investors it is aiming for about $600 billion in total compute spending by 2030.

Regulators are also asking questions

Separately, the Federal Trade Commission has sent civil investigative demands of roughly 50 pages each to OpenAI and Anthropic, according to Axios. They seek documents on security incidents, safety practices, marketing materials and privacy policies. An FTC spokesperson confirmed to FOX Business that the agency is seeking testimony from Anthropic executives. The spokesperson said individuals at other AI companies have been asked to testify too, without naming them.

The open question is the size of the first close. The FT expects it to fall short of $20 billion, and OpenAI has not disclosed the final figure. The wealth-client retail tranche at $1.25 trillion is the next test of demand. Anthropic's listing will show what public investors will pay for a frontier AI lab.