OpenAI has reduced its latest fundraising target by $10 billion as a sharp selloff in technology stocks intensifies scrutiny of the capital flowing into artificial intelligence, adding pressure to the ChatGPT maker’s efforts to secure fresh investment ahead of a planned public listing in 2027.
The company is now seeking approximately $20 billion, down from an earlier target of about $30 billion, while its desired valuation has fallen to $1.25 trillion from $1.4 trillion, the Financial Times reported on Friday, citing people familiar with the matter.
The reduction comes as investors reassess the scale of spending required to build and operate advanced AI systems, with concerns growing over whether the revenue generated by the technology will justify the enormous commitments to computing infrastructure.
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OpenAI reportedly set Friday as the deadline for investors to commit to the funding round. However, the initial closing is expected to raise less than $20 billion after some investors reduced their allocations, the newspaper said. The company could therefore secure less than its revised target in the first phase of the transaction.
The fundraising adjustment is significant because OpenAI has been seeking to maintain access to large pools of capital while competing with rivals that are also preparing to tap public markets. Analysts say its ability to attract investors at a lower valuation will provide an indication of how private-market demand is responding to the recent weakness in technology stocks.
A consortium of investors from the United Arab Emirates, including state-backed technology investment fund MGX, is expected to become the largest participant in the funding round, according to the FT.
As part of the proposed arrangement, OpenAI would receive an option to lease newly developed computing capacity in the region. The structure would connect the company’s fundraising requirements with its growing need for access to advanced computing infrastructure, one of the most expensive components of developing and deploying large AI models.
The participation of UAE investors also highlights the Gulf’s expanding role in financing the global AI industry. Governments and investment funds in the region have been committing substantial resources to technology infrastructure, including data centers and computing capacity, as they seek a larger position in the international AI market.
Venture capital firms including Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz are also expected to participate, the report said. Wealthy individuals will have an opportunity to invest through a subsequent retail offering at the proposed $1.25 trillion valuation.
The revised valuation would still place OpenAI among the world’s most highly valued private companies. However, the reduction from $1.4 trillion signals a more cautious approach to pricing the company at a time when investors are increasingly questioning the financial assumptions behind the AI investment boom.
The fundraising change comes amid a broad decline in US technology shares, driven by concerns about the scale of investment required to sustain the AI industry.
The technology-heavy Nasdaq Composite fell 2.9% on Friday and is now 7.8% below its record closing high reached on October 6. The decline has increased pressure on companies whose valuations have benefited from expectations that AI adoption will generate substantial long-term revenue.
The key investment question is shifting from how quickly companies can expand computing capacity to whether the resulting infrastructure can generate sufficient returns. Major technology companies and AI developers have committed billions of dollars to data centers, specialized chips, energy supply, and networking equipment. These investments require sustained demand for computing services and continued growth in enterprise and consumer adoption.
OpenAI’s challenge is pronounced because its expansion depends on access to expensive computing resources even as it works to improve the commercial returns from its products. A lower fundraising target could ease the immediate pressure to secure capital, but it also suggests that some investors are becoming more selective about the amount they are willing to commit and the valuation they are prepared to accept.
The timing also carries competitive implications. OpenAI is pursuing a stock market listing in 2027 and has been keen to complete the funding round ahead of Anthropic’s expected public-market debut. Reuters reported that the two companies are competing for capital from a similar pool of institutional and private investors.
Anthropic’s anticipated listing could intensify competition for investor attention and capital, especially if market conditions remain unsettled. Both companies require substantial funding to support model development, computing infrastructure, and commercial expansion.
The backdrop means that OpenAI’s decision to lower its target comes at a sensitive point in the AI industry’s financing cycle. The company remains capable of attracting major institutional investors, including funds from the Middle East and leading venture capital firms. However, the expected reduction in the initial fundraising proceeds and the lower valuation are seen as an indication that investors are placing greater emphasis on capital discipline as the cost of competing in advanced AI continues to rise.