OpenAI Slashes Fundraising Target by $10 Billion, Valuation Drops to $1.25 Trillion
OpenAI has drastically reduced the size and valuation of its latest fundraising round. From an initial target of $30 billion at a $1.4 trillion valuation, the company now seeks to raise $20 billion at $1.25 trillion — and has secured only about $11 billion in commitments so far, according to The Wall Street Journal. The $10 billion cut in the fundraising target and the $150 billion reduction in valuation are clear signals of a shift in investor sentiment toward the artificial intelligence sector.
The news, initially reported by the Financial Times on October 30 and corroborated by the WSJ and Reuters, reveals pressure that had been building since mid-October, when the Nasdaq began losing ground after mixed earnings results from Meta and Tesla fueled debate over whether the AI investment boom is overstated. On Friday, October 30, the Nasdaq 100 fell 3.5%, while the broader Nasdaq fell 2.9%, already 7.8% below its all-time high reached on October 6.
What changed in the round
The round was originally designed to be a demonstration of strength: OpenAI needed to close before Anthropic's anticipated IPO, expected for mid-November. The company set an October 30 deadline for investors to commit their allocations. The result, however, was the opposite of what some analysts expected. Instead of a rush to participate, there was pullback. Some investors reduced their allocations, and the "first close" — the initial tranche of the closing — is expected to fall below the revised $20 billion target.
The valuation dropped from $1.4 trillion to $1.25 trillion, a cut of $150 billion (about 11%). But the most revealing figure is the volume of committed capital: $11 billion against an original target of $30 billion. This means less than one-third of the initial amount has been secured, and even that doesn't represent money actually received — OpenAI is still in the "first close" phase and will need to seek additional commitments over the coming weeks from family offices and high-net-worth investors.
To put this in context, OpenAI's last round in March 2026 raised the valuation to $852 billion with $122 billion in commitments. In just seven months, the valuation jumped 46% (from $852 billion to $1.25 trillion), but market pressure and competition for investor attention with Anthropic — which is preparing its IPO at a mark of $965 billion and IPO projections between $1.5 trillion and $2 trillion — caused contributors to the current round to recalibrate their expectations.
Who is investing (and who is stepping back)
The most committed investors in the round include MGX, a technology fund backed by the United Arab Emirates government, which is expected to be the largest participant. SoftBank, Sequoia Capital, Founders Fund, Andreessen Horowitz, Coatue Management, BlackRock and Dragoneer would also be on the list. The FT reported that Coatue is negotiating to co-lead the round.
But participation from traditional venture capital names appears to have decreased from what was expected. The WSJ points out that OpenAI is seeking additional capital from family offices and high-net-worth individual investors over the coming weeks — which, historically, is slower and less predictable than institutional commitments.
The dynamic is revealing: when the largest VC firms begin to pull back on late-stage rounds, it's because they're asking for more proof that the numbers justify the valuation. In OpenAI's case, the question is particularly sensitive. The company continues to operate as a controlled nonprofit, which means there is no public transparency about its actual revenue numbers, infrastructure costs, or profitability — information that investors want to see before committing billions.
Anthropic's shadow
One factor that many analysts underestimated is the Anthropic effect. OpenAI's competitor is preparing to go public in November with an estimated valuation of $1.5 trillion to $2 trillion — meaning investors may be pausing OpenAI's fundraising to wait and see how the market reacts to Anthropic's IPO. If Anthropic is successful and lists above its private mark, that would validate OpenAI's numbers. If Anthropic debuts at a discount or with weak share performance, investors may pressure OpenAI to cut its valuation even further.
The direct comparison between the two companies is unavoidable. Anthropic already has estimated public revenue (although not formally disclosed), a clear C-Corp corporate structure, and a defined IPO plan. OpenAI, by contrast, maintains its controlled nonprofit structure, making the revenue-to-valuation comparison much harder to calibrate — and more prone to disputes between buyers and sellers.
What this means for the AI market
The cut in OpenAI's fundraising does not mean the company is in financial difficulty. At $1.25 trillion valuation and with $11 billion already committed, OpenAI remains by far the most valuable startup in history and with access to billions in fresh capital. But the signal the market receives is clear: investors are willing to bet on AI, but not at any price.
The sector faces a genuine narrative challenge. After years of promises of radical transformation, investors want to see real revenue, not just long-term projections. The Nasdaq 100's 7.8% drop over two weeks reflects this growing caution. And OpenAI, as the sector's biggest bet, ends up being the most accurate thermometer of investor sentiment.
The question that remains is whether this valuation adjustment in OpenAI's round will be the inflection point that makes investors pull back on other late-stage bets — or whether it will simply be a technical adjustment by a company that still has far more fuel than most traditional corporations.
Sources: Financial Times / Reuters, Wall Street Journal / RuntimeWire, CNBC
✓ Independent sources cross-checked and verified before publishing
