OpenAI Wanted To Raise $30 Billion. Now It’s Asking Investors For a Third Less.

OpenAI is reportedly cutting its latest fundraising target by $10 billion, seeking up to $20 billion instead of the $30 billion it had initially hoped to raise as investors take a more cautious approach to the enormous sums being invested in artificial intelligence.

The ChatGPT maker is now pursuing a post-money valuation of approximately $1.25 trillion, down from an earlier proposal of around $1.4 trillion, according to the Financial Times.

Some investors have reduced their proposed commitments, complicating the company's efforts to secure fresh capital ahead of a potential stock market listing. OpenAI had set an Oct. 30 deadline for investors to commit, although the initial closing is expected to bring in less than the revised target, the newspaper reported.

The funding effort comes after a difficult week for technology stocks, with investors questioning how quickly spending on artificial intelligence will translate into financial returns. They are seeing a moderate rebound on Monday.

Companies including Amazon, Alphabet, Microsoft and Meta have committed enormous sums to expanding data centers, purchasing advanced processors and building the computing infrastructure needed to develop and operate AI systems.

The Nasdaq Composite fell 2.9% Friday, leaving the technology-heavy index approximately 7.8% below its Oct. 6 record closing high. Intel, Nvidia, Micron and other semiconductor stocks were among those hit by the selloff.

The pressure has been particularly noticeable among companies spending heavily on AI infrastructure while reporting weaker cash flow or disappointing financial forecasts.

Amazon's third-quarter earnings release showed that the company expects approximately $220 billion in cash capital expenditures during 2026, much of it directed toward artificial intelligence infrastructure.

Amazon also reported negative free cash flow of $42.4 billion over the 12 months ended September, compared with positive $14.8 billion a year earlier. The company attributed the decline primarily to substantially higher spending on property and equipment.

Microsoft, another major investor in AI, reported stronger cash generation alongside continued demand for cloud computing services.

Its fiscal first-quarter results showed revenue rising 19% to $92.3 billion, while operating income increased 21% to $45.9 billion. Azure cloud revenue grew 48% during the quarter.

For OpenAI, the financial requirements of developing advanced AI models remain substantial. Training increasingly sophisticated systems and serving a growing number of users require expensive computing infrastructure, including specialized chips, data centers and electricity.

The company has sought major investments to support those requirements while expanding its consumer products, enterprise services and tools for software developers.

OpenAI has already completed one of the largest private fundraising rounds in history.

In a March 31 announcement, the company said it had raised $122 billion in committed capital at a post-money valuation of $852 billion.

That financing was intended to support additional computing capacity and wider deployment of its AI products. The newly proposed $1.25 trillion valuation would still represent a substantial increase from the March figure, despite the reported reduction in the company's latest fundraising ambitions.

Investors from the United Arab Emirates, including state-backed technology investment company MGX, are expected to lead the new funding round alongside Coatue Management, according to CNBC's earlier reporting.

The Financial Times identified Sequoia Capital, Founders Fund, Andreessen Horowitz and SoftBank among the prospective participants.

The proposed arrangement could also provide OpenAI with access to additional computing capacity in the UAE, linking the fundraising effort to its growing infrastructure requirements.

The financing comes as competition with rival AI developer Anthropic intensifies. Anthropic is preparing for a potential public market debut, with reports indicating that it could seek a valuation of at least $1.5 trillion. The company has not finalized the timing or terms of any listing.

Both businesses are competing for investments from major venture capital firms, institutional investors and international investment funds, while expanding their AI products for consumers and businesses.