OpenAI has scaled back the enormous private funding round it has spent months negotiating, telling investors it now wants to raise up to $20 billion rather than the $30 billion originally discussed, according to a Financial Times report relayed by CNBC on Friday. The smaller target comes with a smaller headline number attached to the company itself: OpenAI is now pitching the round at a valuation of roughly $1.25 trillion, down from the $1.4 trillion figure that circulated as recently as last month.
The round has not closed, and people close to the talks caution that the final amount raised could end up lower still than the revised $20 billion target, since some investors have already trimmed the size of their planned commitments. A consortium anchored by the UAE state-backed fund MGX is expected to be the single largest participant, with Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz also involved, according to people briefed on the negotiations.
A Rough Week for AI Spending Stories
The retreat lands in the middle of a broader selloff in AI-adjacent stocks, triggered in large part by last week's run of hyperscaler earnings. Intel and Amazon both disappointed investors on Thursday: Amazon's results pointed to still more AI capital spending ahead even as sales and profit missed Wall Street's targets, feeding worries that the industry's biggest spenders cannot yet show a return on the hundreds of billions already committed to data centers and chips. Microsoft and SpaceX were the exceptions that week, with results that suggested at least some of that spending was starting to pay off — a split that has left investors divided on how to price the sector heading into 2027.
That divide is exactly what OpenAI's financing talks are now running into. Reporting on the pared-back round ties the cut directly to investors asking a blunter question than they have in previous rounds: whether the scale of spending required to train and run frontier AI models, and to build the physical infrastructure underneath it, will ultimately generate returns big enough to justify the valuations being asked for. OpenAI's own commitments — to data center capacity, chip supply deals and compute contracts — run into the hundreds of billions of dollars over the coming years, a figure that dwarfs the company's current revenue.
OpenAI is not short of potential backers; a smaller target is not the same thing as a failed raise, and nothing in the reporting suggests the company is struggling to find investors willing to write checks. But the fact that it is asking for less, at a lower price, is itself a signal that the unconditional enthusiasm that defined AI fundraising over the past two years has started to give way to more pointed diligence.
Competing With Its Own Rival for Capital
Timing has made the round harder, not easier. OpenAI is effectively competing for the same pool of capital as Anthropic, whose own initial public offering is reportedly being prepared for as early as the week of November 16 — a listing that would give investors a liquid, publicly traded way to bet on frontier AI instead of locking money up in a private round. The same week's coverage also noted that Meta picked up a credit warning tied to its own cash flow and AI spending plans, adding to a sense that credit-rating agencies and private investors alike are starting to scrutinize AI capital plans more closely across the board, not just at OpenAI.
OpenAI has already pushed its own plans for a stock market listing into 2027, which leaves this private round as one of its main near-term levers for raising the cash needed to keep funding compute commitments in the meantime. A smaller round at a lower valuation does not change that underlying need — it simply means OpenAI will have raised less of the capital it will eventually require, on terms slightly less favorable than it had hoped for just weeks ago.
What happens next largely depends on how the broader AI-stocks selloff resolves over the coming weeks. If sentiment stabilizes, OpenAI could still see the round oversubscribed even at the lower target; if it worsens, the company may face pressure to cut its ask again before the round finally closes. Markets are expected to get a clearer read on investor appetite once Anthropic's IPO terms become public, likely within the next two to three weeks.
