$10 Billion Cut: Why OpenAI's Funding Round Valuation Fell

A month ago, OpenAI wanted $30 billion at a $1.4 trillion valuation. By Friday's investor deadline, it was asking for about $20 billion at $1.25 trillion, and some backers had still cut their cheques.

That $10 billion cut is the clearest sign yet that the OpenAI funding round valuation story has hit the same wall as AI stocks.

Quick answer

• The Financial Times reported OpenAI cut its funding target by $10 billion, to about $20 billion. CNBC confirmed the new "up to $20 billion" figure.
• The target valuation dropped to $1.25 trillion, down from $1.4 trillion.
• The first close is expected to raise less than $20 billion. The Wall Street Journal says $11 billion is secured so far.
• Nothing in the reports changes ChatGPT plans or prices in India.

How much is OpenAI trying to raise now?

OpenAI is now seeking up to $20 billion in this round, down from an earlier target of about $30 billion.

CNBC confirmed on Saturday that OpenAI is seeking to raise up to $20 billion, paring back its earlier target of up to $30 billion (CNBC).

The round has not closed. A person familiar with the deal told CNBC the figures could still change.

Even the lower number may not be met at first. OpenAI set a Friday deadline for commitments, and the "first close" is expected to come in below $20 billion because some investors reduced their allocations.

TechCrunch adds a detail from The Wall Street Journal: OpenAI has secured $11 billion so far, and some large investors gave a "tepid" response (TechCrunch).

What is the OpenAI funding round valuation now?

The target valuation is now $1.25 trillion on a post-money basis, down from the $1.4 trillion discussed earlier.

ET EnterpriseAI reports the ChatGPT maker is seeking about $20 billion at a $1.25 trillion valuation, compared with $30 billion at $1.4 trillion last month (ET EnterpriseAI).

The valuation did not fall overnight. Bloomberg reported last week that OpenAI was already seeking capital at $1.25 trillion in the final stage of talks. The money target is what fell this week.

Here is how the numbers line up against OpenAI's main rival:

Bar chart: OpenAI's earlier $1.4 trillion target, new $1.25 trillion target, and Anthropic's planned IPO valuation of at least $1.5 trillion

Source: ET EnterpriseAI, Mint (citing the Financial Times)

What most guides miss: the $11 billion OpenAI has reportedly secured is only just over half of even the reduced $20 billion goal. And the whole round is small next to the $122 billion OpenAI raised in March. The headline valuation barely moved; what shrank is how much investors are willing to put in right now.

Why did OpenAI cut its funding target?

A sharp sell-off in AI stocks and Anthropic's planned listing made investors more cautious, so OpenAI lowered the target to close the round faster.

Mint, citing Reuters, says the Nasdaq slumped 2.9% on Friday and is down 7.8% from its all-time closing high on 6 October (Mint).

The Nasdaq 100 fell 3.5 per cent on the same day, according to ET EnterpriseAI.

The pain was wide. CNBC reports Intel fell 25% on weak revenue guidance, Micron dropped 5.5% and Nvidia slid 4%. Alphabet had its worst trading day ever on Thursday after search revenue missed expectations.

Investors are asking one question: will the huge spending on data centres and GPUs pay back? We looked at the same worry in our post on whether Nvidia is fuelling an AI bubble. Microsoft, Google and Amazon all gave capex figures or forecasts last week that came in below analysts' estimates.

Mint also notes S&P Global Ratings moved Meta's AA- credit rating outlook to negative, pointing to strain from AI spending.

Then there is Anthropic. It is preparing to go public next month at a valuation of at least $1.5 trillion. Mint reports OpenAI wants to finish its round before that IPO, because both companies are pitching a largely similar group of investors.

Who is still investing in OpenAI?

A UAE consortium that includes state-backed MGX is expected to be the largest investor, with big venture firms and SoftBank also joining.

ET EnterpriseAI lists SoftBank Group, Sequoia Capital, Coatue Management, Founders Fund and Andreessen Horowitz as planned participants (ET EnterpriseAI).

The UAE deal comes with a perk. OpenAI would get the option to lease newly built computing capacity in the Gulf region.

There is also a retail piece. Wealthy individuals will be able to invest in a later offering at the same $1.25 trillion valuation, and TechCrunch says that could take the total to the $20 billion target.

OpenAI, Sequoia, Founders Fund and SoftBank declined to comment. MGX, Coatue and Andreessen Horowitz did not respond.

What does this mean for ChatGPT users in India?

For everyday users, nothing changes today: none of the reports mention new prices, plan cuts or feature limits for ChatGPT in India.

India matters a lot to OpenAI. Sam Altman has said India has 100 million weekly active ChatGPT users and is its second-largest user base after the United States (TechCrunch).

OpenAI opened a New Delhi office in August 2025 and launched a sub-$5 ChatGPT Go tier that was later made free for a year for Indian users. Cheap or free plans like that cost OpenAI real computing money.

The bigger link is cost. OpenAI says it needs fresh money for computing. If raising money gets harder, pressure to earn more from paid plans usually grows. That is a reasonable thing to watch, not a confirmed plan.

For investors, the reports say OpenAI is preparing for a potential IPO next year. This post is general information, not investment advice.

FAQs

How much is OpenAI raising in its latest funding round?

About $20 billion, down from roughly $30 billion. The first close is expected to come in below $20 billion, and the Wall Street Journal reports $11 billion is secured so far.

What is OpenAI's valuation in the new round?

The target is $1.25 trillion on a post-money basis, down from $1.4 trillion discussed earlier.

Why did OpenAI lower its funding target?

Reports point to a sell-off in AI stocks, investor worry about AI spending, and competition for the same investors from Anthropic's planned IPO.

Is OpenAI planning an IPO?

The Financial Times, as cited by ET EnterpriseAI, says OpenAI is preparing for a potential IPO next year. Nothing is official yet.

Will ChatGPT prices change in India because of this?

No price change has been announced. The reports cover funding only.

Figures come from media reports that cite unnamed people familiar with the deal. The round is still open, and the numbers may change.

Related reading

• $105 Billion Guarantee: Is Nvidia Fuelling an AI Bubble?
• 13 New Voices: ChatGPT Hindi Now Talks as Neer and Leher
• 8 States Sue OpenAI Over ChatGPT Child Safety Claims

Sources

• CNBC: OpenAI pares fundraising goal, now seeking up to $20 billion in latest round
• TechCrunch: OpenAI reportedly lowers funding target for new round
• Mint: OpenAI's $30 billion funding ambition shrinks to $20 billion
• ET EnterpriseAI: OpenAI cuts fundraising target by $10 billion to $20 billion amid AI market selloff
• TechCrunch: India has 100M weekly active ChatGPT users, Sam Altman says