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OpenAI cuts funding target to $20 billion
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OpenAI cuts funding target to $20 billion

OpenAI has reportedly lowered its latest fundraising target by $10 billion and cut its valuation goal to $1.25 trillion.

Ammar Rahimi · 2 November 2026 · 3 min read

OpenAI is now seeking up to $20 billion in its latest funding round, down from an earlier target of about $30 billion. The Financial Times reported this on Friday, October 30, 2026, and CNBC confirmed it on Saturday. The round is still open and has not closed, so the final numbers could still change.

1. What happened

According to the Financial Times, OpenAI reduced its target for the round by $10 billion to roughly $20 billion. The company's post-money valuation goal fell to $1.25 trillion from $1.4 trillion, a $150 billion reduction.

The deadline for investors to commit was Friday. The FT reported that the first close is expected to come in below $20 billion because some investors reduced their allocations.

The Wall Street Journal added its own numbers: OpenAI has secured $11 billion so far, and the response from some large investors was described as tepid.

2. Who is investing

A consortium of investors from the United Arab Emirates, including the state-backed technology fund MGX, is expected to be the largest participant. CNBC reported that UAE investors are leading the round alongside Coatue.

Venture firms including Founders Fund, Sequoia Capital and Andreessen Horowitz are also expected to take part, according to the FT reporting picked up by Reuters. Wealthy individuals can join a subsequent retail offering at the $1.25 trillion valuation.

As part of the deal, OpenAI would reportedly gain the option to lease newly developed computing capacity in the UAE region.

3. Why the target came down

The backdrop is last week's tech selloff. Investors are asking whether hundreds of billions spent on data centers and GPUs will deliver adequate returns.

The Nasdaq Composite fell 2.9% on Friday, bringing its total decline to 7.8% from its record closing high on October 6, according to Investing.com. Intel dropped 25% on Friday after weak revenue guidance, Micron fell 5.5% and Nvidia fell 4%, per CNBC.

Alphabet also had the worst trading day in its history on Thursday after search revenue fell short of expectations, partly because advertising inside its AI Mode is not yet monetizing as well as classic search.

4. The race with Anthropic

Money is another front in the rivalry. OpenAI has been racing to close this round before Anthropic's expected stock market listing in mid-November. The two companies are tapping the same pool of institutional investors.

Reuters has reported that OpenAI is targeting a 2027 listing, so this funding is part of the runway toward that IPO.

5. What it means for you

This is not just a Wall Street story. It signals that easy money for AI startups is ending.

  1. Calibrate your expectations. Even the world's biggest AI company is trimming its ask. If you build a business on AI tools, do not put every egg in one basket.
  2. Prices may rise. Expensive capital creates pressure to generate revenue. We have already seen premium plan limits raised, and more pricing changes are likely.
  3. Watch small tools closely. When funding dries up, small companies get hit first. Privacy-focused assistant Ollie just announced it is shutting down on November 6 for exactly this reason. Keep a backup plan for any single small tool you depend on.
  4. No immediate change for users. ChatGPT and its rivals work as normal today. These figures are about investor expectations, not service disruptions.

Sources