- OpenAI is now targeting as much as $20 billion, less than its previous $30 billion target.
- The FT values OpenAI at $1.25 trillion. The UAE investors and Coatue are leading this round.
- The WSJ reports that current commitments total around $11 billion.
Back in December 2015, a group of tech founders and investors pledged $1 billion to develop artificial intelligence for the benefit of humanity. Almost 11 years later, OpenAI is seeking up to $20 billion in funding, which is about a third less than its original $30 billion goal.
On October 31, CNBC confirmed that OpenAI is seeking up to $20 billion. The funding round is still open, so the numbers could change, according to someone familiar with the deal. OpenAI has not replied to CNBC’s request for comment.
The Financial Times first reported the reduction and said OpenAI gave investors until October 30 to commit, with some choosing to reduce their allocations. Reuters, citing the FT, reported that the first close is expected to bring in less than $20 billion.
Sam Altman, then president of Y Combinator, founded OpenAI as a nonprofit in San Francisco, along with Elon Musk, Greg Brockman, Ilya Sutskever, and others. Musk left the board in 2018. Altman has served as CEO since 2019.
OpenAI now offers ChatGPT to both consumers and businesses. According to Bloomberg, its annualised revenue was about $50 billion at the end of September, and it is expected to reach at least $70 billion by the end of 2026. With a $1.25 trillion valuation, this round values OpenAI at about 25 times its September revenue run rate.
Key investors in the current round
According to CNBC, UAE investors and Coatue are leading the round. A group that includes state-backed MGX is expected to be the largest participant. Reuters reports that OpenAI might be able to lease new computing capacity in the region.
Founders Fund, Sequoia Capital, and Andreessen Horowitz are also expected to join. Wealthy individuals could invest at the same valuation later, which might bring the total to $20 billion.
The valuation has changed as well. According to our reporting, Bloomberg first reported the raise on September 29 at a $1.4 trillion valuation. The current $1.25 trillion figure is $150 billion, or 10.7%, lower.
The valuation is described inconsistently: CNBC’s October 22 report called $1.25 trillion a pre-money valuation, while its latest report, citing the FT, calls it post-money, which could mean a difference of up to $20 billion. Still, the current figure is about 47% higher than the $852 billion valuation from OpenAI’s $122 billion round that closed on March 31.
Shared investors in major AI companies
Four investors expected to join OpenAI’s round have also invested in its main competitor this year. Coatue, MGX, and Founders Fund led or co-led Anthropic’s $30 billion Series G at a $380 billion valuation in February. Sequoia helped lead Anthropic’s $65 billion Series H at a $965 billion valuation in May.
This overlap is making some investors hesitant. Anthropic filed its prospectus on October 26 for a Nasdaq listing under the ticker ANT, and reports suggest it could debut in mid-November at a valuation between $1.5 trillion and $2 trillion. The filing shows $16.3 billion in revenue for the first half of 2026 and a second-quarter operating profit of $974 million. OpenAI’s prospectus, which was filed confidentially on June 8, has not been made public.
Harrison Rolfes, a senior late-stage research analyst at PitchBook, told Tech Funding News that OpenAI has “a free option” to see how institutions respond to Anthropic’s audited financials before setting its own price. He said this option is less valuable if OpenAI is already far along in its own SEC review.
Rising compute costs and IPO timing
The funding reduction happened during a tough week for AI stocks. On October 30, Intel dropped 25% after weak guidance, and Nvidia lost 4%, according to CNBC. Microsoft, Alphabet, and Amazon also reported capital spending below analyst expectations.
OpenAI still needs significant funding. In February, it told investors it aims to spend about $600 billion on compute by 2030. J.P. Morgan Global Research estimates that AI capital spending could reach $900 billion in 2026 and $5.5 trillion in total by 2030.
The next big one is coming in the next few weeks. If investors are valuing Anthropic at $1.5 trillion or more, then OpenAI’s $1.25 trillion would look pretty attractive. If they’re not, then weak demand in OpenAI’s round would signal that overall appetite is there.
