- OpenAI cut its fundraising target from $30B to $20B & its valuation from $1.4T to $1.25T
- The cut follows a ~10% drop in the Nasdaq 100 since its October 6 record high amid AI stock weakness
- A UAE-based group led by MGX is the likely lead investor; Anthropic is preparing its own November IPO
- OpenAI raised $122B in March 2026 & has deferred its own IPO plans to 2027
ChatGPT’s parent company OpenAI has cut the size of its most recent funding round to $1.25 trillion from an original target of $10 billion, cutting its target from $30 billion to $20 billion and lowering its implied valuation from $1.4 trillion, a report from the Financial Times stated on October 30, 2026.
Why The Cut Happened
The pullback comes after a big slump in artificial intelligence stocks. In the last few weeks the Nasdaq 100 index is down by around 10%, having hit its record level on October 6. On Friday alone it fell 4.5%.
OpenAI slashes funding target by $10bn as tech anxieties mount https://t.co/1436KGUP6C
— Financial Times (@FT) October 31, 2026
Some investors decided to take profits as there has been a repricing of the wider tech sector due to concerns over AI infrastructure spending. Investors had until October 30 to submit initial commitments, and the Wall Street Journal reported approximately $11 billion raised in the first round.
Who Is Still Investing
A UAE-based consortium led by MGX remains the likely anchor investor, with the deal structured to let OpenAI lease newly built computing capacity in the UAE.
Other potential investors include Founders Fund, Coatue, Sequoia Capital, Andreessen Horowitz, and SoftBank. OpenAI is also reportedly planning a separate offering for individual wealthy investors at the same $1.25 trillion valuation.
OpenAI Vs Anthropic: The IPO Race
With OpenAI raising $122 billion in March 2026 and has deferred its own IPO to 2027. Meanwhile, rival Anthropic, the company behind the Claude AI assistant, is preparing its own IPO in November, reportedly targeting a valuation of up to $1.5 trillion and aiming to raise up to $100 billion, they are now direct competitors for funding in the AI industry.
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