Key takeaways
- OpenAI reportedly reduces fundraising target by $10 billion
- Proposed valuation falls to $1.25 trillion from $1.4 trillion
- AI stock selloff pressures investor appetite for funding
OpenAI has reportedly reduced its latest fundraising target by $10 billion as a sharp selloff in artificial intelligence stocks makes investors increasingly reluctant to finance the industry's enormous infrastructure ambitions.
According to an October 30 Reuters report, citing the Financial Times, the ChatGPT developer is now seeking approximately $20 billion instead of $30 billion. Its proposed valuation has also fallen from $1.4 trillion to $1.25 trillion.
The reduction comes as investors question whether AI companies can generate sufficient revenue to justify the hundreds of billions of dollars being committed to computing infrastructure.
OpenAI Cuts Funding Ambitions as Investors Reduce Commitments
OpenAI had initially sought $30 billion in fresh capital to support its expansion and preparations for a potential public listing in 2027.
However, some investors reportedly reduced their planned contributions ahead of Friday's commitment deadline.
The fundraising round's initial closing is now expected to raise less than the revised $20 billion target, according to people familiar with the negotiations.
A group of United Arab Emirates investors, including state-backed technology fund MGX, is expected to become the largest participant.
As part of the proposed arrangement, OpenAI could receive an option to lease newly developed computing capacity in the region.
Other potential investors reportedly include Founders Fund, Coatue Management, Sequoia Capital and Andreessen Horowitz.
The revised fundraising target follows an earlier valuation reduction.
Coinpaper reported on October 23 that OpenAI's valuation had fallen by approximately $150 billion, from $1.4 trillion to $1.25 trillion.
The latest development suggests investor concerns are now affecting not only the price of OpenAI's shares but also how much capital the company can attract.
However, the funding terms remain subject to negotiations, and the company has not publicly confirmed a completed financing at the reported valuation.
AI Stock Crash Raises Questions About OpenAI's Computing Costs
OpenAI's financing difficulties coincide with one of the sharpest technology-sector selloffs of 2026.
The Nasdaq Composite dropped approximately 2.9% on October 30, leaving it 7.8% below its October 6 record closing level.
Investors have become increasingly concerned about the enormous spending required to build AI data centers, purchase advanced processors and secure electricity supplies.
Those worries have spread across companies supplying infrastructure to OpenAI and its competitors.
Amazon recently reported that trailing annual free cash flow deteriorated from positive $14.8 billion to negative $42.4 billion, despite strong cloud revenue growth.
Coinpaper's Amazon analysis highlighted how infrastructure investment can consume cash faster than profitable businesses generate it.
Meanwhile, S&P Global Ratings revised Meta's credit outlook to negative, warning that its expanding AI investments could produce a substantial cash flow deficit.
The agency's $71 billion forecast illustrates how financing pressure is beginning to affect credit assessments, not just stock valuations.
For OpenAI, securing affordable computing capacity remains essential to training and operating increasingly advanced AI models.
Anthropic IPO Adds Pressure to OpenAI's Fundraising
OpenAI also faces growing competition for investor capital from Anthropic, the developer of Claude.
Anthropic filed publicly for a Nasdaq listing on October 26, revealing substantial revenue growth alongside major operating and accounting losses.
Coinpaper's Anthropic IPO coverage detailed the company's $80.7 billion first-half net loss, much of which reflected noncash accounting charges.
The company could begin trading in November, potentially giving investors another way to gain exposure to the rapidly expanding AI market.
OpenAI has reportedly been seeking to complete its financing ahead of Anthropic's anticipated debut because the companies are competing for overlapping pools of institutional capital.
