OpenAI lowers its funding target to $20 billion and its valuation goal to $1.25 trillion, FT reports

Compiled from reports by Trending Topics, Startup Fortune and Reuters. See the original articles linked below.

OpenAI has reduced the size of its current fundraising round by $10 billion, to roughly $20 billion, according to a report from the Financial Times on October 30. Reuters, Trending Topics and Startup Fortune all relayed the report, which says the company is also aiming for a lower valuation than before.

What changed

Reuters, summarising the Financial Times account, wrote that the company now wants a valuation of $1.25 trillion. Trending Topics put the earlier goal at $1.4 trillion, and Startup Fortune said that higher figure had been pitched to private wealth clients in mid-October. The Financial Times cited people familiar with the matter, and OpenAI declined to comment, according to Startup Fortune.

Reuters reported that the first close of the round is expected to bring in less than $20 billion because some investors have scaled back their allocations. Trending Topics gave the same account of the first close.

Who is expected to take part

Reuters said a consortium from the United Arab Emirates, including the state-backed investor MGX, is expected to be the largest participant. In exchange, it wrote, OpenAI would be able to lease newly built computing capacity in the region. Reuters also listed Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz as expected participants, and said wealthy individuals could later be offered shares at the same $1.25 trillion valuation.

Startup Fortune reported that SoftBank's commitment had reportedly shrunk from $30 billion to $20 billion, and that Nvidia had cut an earlier plan of up to $100 billion to $30 billion. It added that Microsoft and the rest of the syndicate were holding at around $10 billion. Trending Topics did not give these commitment figures, and Reuters did not either.

Market backdrop

All three outlets linked the cut to a sell-off in technology shares driven by concern over heavy spending on artificial intelligence. Reuters and Trending Topics both said the Nasdaq fell 2.9% on Friday, and Reuters added that the index was 7.8% below its October 6 closing high. Startup Fortune described a difficult week for stocks tied to AI capital spending, saying Alphabet lost about $700 billion in market value after raising its spending guidance and that Intel shares were down nearly 20% from September highs.

Reuters wrote that OpenAI wanted to close the round partly to get ahead of the imminent stock market listing of Anthropic, since the two companies draw on a similar pool of investors. Trending Topics also said Anthropic's expected mid-November listing is competing for the same institutional money.

Revenue and listing plans

According to Trending Topics, OpenAI's annualised revenue run rate was about $50 billion at the end of September, and the company reportedly expects to burn $278 billion in cash through 2030. Startup Fortune said the Financial Times put the run rate close to $50 billion, below a figure near $70 billion that had circulated earlier in the year, and that OpenAI has not disputed that it is on pace for $70 billion by the end of 2026.

Reuters reported that OpenAI is pursuing a listing in 2027. Trending Topics said the company has postponed its public offering and that chief executive Sam Altman said in September that listing this year would be unwise, citing safety concerns. Trending Topics also pointed to Oracle, CoreWeave and Nvidia as companies with significant exposure to OpenAI.

Startup Fortune noted that even at the lower figures, the round would still carry a $1.25 trillion valuation, and that final terms were still being worked out.

Sources

This article was compiled with AI assistance from the reports listed above and reviewed by GMA before publishing.