OpenAI Cuts Funding Valuation Target to $1.25 Trillion After Investor Resistance, FT Reports

Since OpenAI began pitching a fixed $1.4 trillion price for a roughly $30 billion raise, the number has moved. On Thursday, Oct. 22, OpenAI cut its target by $150 billion, to $1.25 trillion, a drop of about 10.7%. The Financial Times reported that some investors resisted the higher figure.

The lead-investor question from earlier this week is also partly answered. People familiar with the talks told Bloomberg that Coatue Management is in talks to co-lead. The Financial Times reported that UAE funds are also in talks to lead.

What has changed in the deal

OpenAI told investors it aims to have commitments finalized by the end of next week, according to Bloomberg's sources. The Financial Times reported that investors have until Oct. 30 to commit. The round could come in below $30 billion, and Bloomberg's sources said final terms could still change.

The UAE leg carries a side benefit for OpenAI. The deal would give it a right of first refusal on new computing capacity developed by its UAE partners, according to the Financial Times. OpenAI is also negotiating a separate purchase of more UAE computing capacity.

Nothing has been signed. OpenAI declined to comment.

Where the $1.4 trillion came from

The $1.4 trillion figure was a pre-money valuation that Morgan Stanley and Dragoneer floated to Morgan Stanley's private-wealth clients, according to documents the Financial Times reviewed. Bloomberg's sources said the proposed $1.25 trillion excludes the new capital being raised. The Financial Times labeled only the $1.4 trillion as pre-money. On a $30 billion raise, pre- versus post-money is a $30 billion difference in headline value.

Demand is softer than before

The Financial Times described weaker appetite than in earlier rounds. One investor's description, as the paper relayed it: "There has been zero clamouring... This time is a bit of a thud." Investors cited indigestion after OpenAI's $40 billion raise in March 2025 and its record $122 billion raise in March 2026. The March 2026 round valued the company at $852 billion.

Rival Anthropic has raised close to $100 billion this year, per the Financial Times. Bloomberg's sources put its May raise at $65 billion at a $965 billion valuation. Some investors would rather wait to see how Anthropic's IPO is priced, the Financial Times reported. Bloomberg's sources say that listing is expected next month. Anthropic is reportedly seeking a valuation of $1.5 trillion to $2 trillion.

Jimmy Chang of Rockefeller Global Family Office told the Financial Times: "The market needs to see a successful IPO... These companies need funding."

A cut, not a markdown

The lower number is still about 47% above the $852 billion set in March, so this is a reduced ask, not a falling valuation. No completed funding has been repriced. The round is presented to investors as an "opportunistic" bridge ahead of a possible IPO, according to Yahoo Finance's account of the pitch.

No source has given an official reason for the cut. The Financial Times attributes it to investor resistance. No source ties it to a specific cause beyond that.

The backdrop is rough. The Nasdaq Composite fell 2.60% to 26,008.86 on Oct. 22, its steepest drop since early June, amid worries about AI spending. Meta and Tesla had posted mixed quarterly results. Microsoft, OpenAI's largest listed backer, closed down $11.87, or 2.23%, at $521.08. No source links OpenAI's price change to that day's market move, and Microsoft edged up 0.18% after hours.

The IPO clock

OpenAI confidentially filed its prospectus with the SEC in June and has not set a listing date. The Financial Times reports an IPO is likely in the first half of 2027. CFO Sarah Friar told employees in August that OpenAI "will be a public company in 2027." CEO Sam Altman said in September that going public this year would be "an ill-advised moment," citing AI safety work.

The next hard date is Oct. 30, when investor commitments are due. Whether the round lands at $30 billion, comes in smaller, or slips past the deadline will show how much room OpenAI has left to hold $1.25 trillion before Anthropic's books go public.