OpenAI Cuts Funding Target From 30 Billion to 20 Billion Dollars as AI Market Selloff Hits Tech Stocks

OpenAI has cut its fundraising target from $30 billion to $20 billion, with its implied valuation lowered from $1.4 trillion to $1.25 trillion, the Financial Times reported on October 30.

The reduction came as a broad tech market selloff hit AI-linked stocks. The Nasdaq fell 2.9 percent on October 30, placing it 7.8 percent below its record high from October 6. Investors grew wary of the heavy capital spending required to sustain AI development, with major players like Alphabet, Amazon, and Intel reporting aggressive capex guidance that spooked markets.

Some investors reduced their planned allocations as the deadline for binding commitments passed on October 30. A consortium of UAE investors, led by the state-backed fund MGX, is expected to be the largest participant in the round. As part of the arrangement, OpenAI reportedly secured an option to lease newly developed computing capacity in the region.

OpenAI has delayed its own initial public offering until 2027, citing safety concerns and market conditions. The current funding round is a critical bridge for its operations.

The company's revenue growth remains strong, reportedly rising 77 percent in the third quarter of 2026. Despite the reduced funding target, OpenAI's valuation remains among the highest ever recorded for a private company.

The timing of the reset was influenced by the anticipated IPO of rival Anthropic, expected in mid-November 2026. Investors are benchmarking private AI valuations against public-market performance, and OpenAI aimed to finalize its round before Anthropic's debut provided a reference point.

Big Tech's combined AI-related commitments have reached $3 trillion, up from $2.4 trillion in July. Gartner has warned that much of this investment may never yield a return, adding to investor caution.