OpenAI Reduces Funding Target to $20B Amid Tech Selloff

Key points

• OpenAI is seeking up to $20 billion in a new funding round, down from an earlier target of $30 billion.
• The Financial Times reported the round values OpenAI at $1.25 trillion on a post-money basis.
• Investors from the United Arab Emirates and Coatue are leading the round, which remains open with a Friday deadline for commitments.
• The reduction follows a week of significant declines in AI-linked stocks, including a 25% drop in Intel and a 4% fall in Nvidia.
• Major tech firms like Microsoft, Alphabet, and Amazon recently reported capital expenditure figures below analyst estimates, heightening scrutiny of AI spending returns.

Background

This development follows earlier reports in October 2026 indicating OpenAI was nearing a $30 billion round at a $1.25 trillion valuation, down from an initial $1.4 trillion target. That previous round was described as a bridge to a potential 2027 IPO amid weak market demand.

How outlets are covering it

CNBC confirmed the $20 billion target and noted that the round is still in progress, meaning figures could change. The Financial Times first reported the $10 billion reduction and emphasized the $1.25 trillion valuation. Both outlets agree on the core figures but differ in emphasis: CNBC highlights the ongoing nature of the deal and investor allocations, while the FT focuses on the immediate impact of the reduced target on the broader tech anxiety narrative. Neither source provides a direct comment from OpenAI, as the company did not immediately respond to requests for comment.

Why it matters

The reduction in OpenAI's funding target signals a shift in investor sentiment toward AI infrastructure spending. As major tech companies report lower-than-expected capital expenditures and AI-linked stocks fall, this move may indicate a broader reassessment of the return on investment for large-scale AI data center and GPU acquisitions.

What to watch

The funding round remains open, with a Friday deadline for investors to commit. Final terms and the total amount raised could change as the round progresses. Investors are currently deciding whether to reduce their allocations, which may affect the final outcome of the round.