OpenAI cuts target for latest funding round to $20 billion at $1.25 trillion valuation
According to the Financial Times, as relayed by Trending Topics, OpenAI has cut the target for its current funding round by $10 billion, from $30 billion to $20 billion (about €18 billion). The desired valuation fell from $1.4 trillion to $1.25 trillion, a $150 billion reduction. Binding commitments were due on the Friday deadline, and the first close could land below $20 billion. A consortium of UAE investors, including the state-backed fund MGX, is expected to be the largest participant, and OpenAI would gain an option to lease newly developed computing capacity in the region.
Wealthy individuals are set to get a later retail offering at the same $1.25 trillion valuation, which could bring the round back to about $20 billion. The reduced target follows a $122 billion raise in March at an $852 billion valuation. TechCrunch, citing a Wall Street Journal follow-up, reported that OpenAI has secured $11 billion so far and met a tepid response from some large investors. Investors had previously been told annualized revenue was $68 billion to $70 billion, while the FT and Reuters put the end-of-September run rate at about $50 billion. OpenAI declined to comment, and the final terms are still being worked out.
Why it matters
For founders, the signal is that investors are pushing back on pricing for very large private rounds. OpenAI had to shrink both the size and the valuation of its raise within weeks, so smaller AI companies should expect buyers to press harder on compute costs, margins and how long capital takes to pay back. A valuation reduction of roughly 11 percent in a short window shows that marks set in a rising market can reverse quickly.
Operators planning their own raises should build longer timelines and assume first closes may come in below target. Suppliers and lenders tied to OpenAI are also reading the round as a test of demand for AI infrastructure exposure. Until a final close is confirmed, the $20 billion and $1.25 trillion figures should be treated as provisional.
Key points
- 1OpenAI's target fell by $10 billion, from $30 billion to $20 billion, according to the Financial Times.
- 2The desired valuation dropped from $1.4 trillion to $1.25 trillion, a $150 billion reduction.
- 3The first close could come in below $20 billion because some investors reduced their allocations.
- 4The March round raised $122 billion at an $852 billion valuation.
- 5Annualized revenue was about $50 billion at end-September, versus the $68 billion to $70 billion investors were previously told.
