OpenAI has reduced its fundraising target by $10 billion to $20 billion as investor caution grows amid broader tech market declines and rising competition from rivals like Anthropic.
The artificial intelligence company lowered its goal for the current funding round from $30 billion to $20 billion, according to a report by The Financial Times on Friday. The move reflects growing hesitation among large investors regarding the profitability and sustainability of massive AI infrastructure investments.
Valuation and Investor Sentiment
OpenAI is seeking to raise the capital at a valuation of $1.25 trillion, down from the previously reported $1.4 trillion. The Wall Street Journal reported that the company had already secured approximately $11 billion in commitments, which is less than half of its initial $30 billion target.
Investor appetite has been dampened by what the Journal described as “market jitters” surrounding the AI industry. Some large investors showed “tepid interest” in the round, prompting OpenAI to pivot its strategy. The company now plans to raise additional funds from family offices and high-net-worth individuals over the coming weeks to reach the new $20 billion total.
OpenAI did not immediately respond to requests for comment regarding the reports.
Broader Market Context and Competition
The funding adjustment coincides with significant turbulence in the technology sector. The Nasdaq 100 index fell 3.5% on Friday, driven by a selloff of AI-related shares. This decline followed a period where the index had already lost more than $1.2 trillion in market capitalization since the beginning of October. Traders are increasingly questioning whether current AI investments will generate sufficient returns to justify their costs.
Volatility has affected major players across the industry. On Thursday, shares of Alphabet, the parent company of Google, dropped 13% after the company released quarterly results that heightened concerns about the financial impact of AI development. Alphabet lost approximately $500 billion in market value following the report.
Competition is also intensifying as OpenAI prepares for a potential public offering. Rival AI firm Anthropic filed for an initial public offering on Monday, revealing $16.3 billion in six-month revenue but also an $80.7 billion net loss. Despite the losses, Anthropic’s revenue figures represented a 1,300% increase from the same period in 2025.
OpenAI has positioned its current funding round as an “opportunistic” bridge before its own potential IPO, according to reports from late October. The reduction in the funding target signals a shift in how the company is navigating the current economic landscape and investor expectations.
Source: PYMNTS
