# OpenAI cuts funding target to $20B at $1.25T valuation, FT reports

Digest AI · Business & Funding · published 2026-10-31T04:29:00Z · updated 2026-10-31T04:38:00Z

Canonical: https://digestai.news/story/openai-cuts-funding-target-to-20b-at-1-25t-valuation-ft-reports

## Summary

OpenAI has lowered its fundraising goal to about $20 billion at a $1.25 trillion valuation, down from a previous target of $30 billion at $1.4 trillion, the Financial Times reported, citing people familiar with the matter. The company had pointed to a sharp revenue increase since July to justify nearly doubling its valuation from $852 billion, but a tech sell-off and growing investor scrutiny of AI spending forced a reset. The Nasdaq 100 fell 3.5% on Friday and posted its worst month since March 2025, dropping 6.65% in October.

A consortium of UAE investment groups including state-backed MGX is expected to be the largest participant, with an option to lease newly developed computing power in the region. Founders Fund, Coatue, Sequoia Capital, Andreessen Horowitz and SoftBank also plan to take part. The initial close was expected to bring in less than $20 billion after some investors reduced allocations, and Friday was set as the deadline for commitments. OpenAI raised $122 billion in March.

## Key points

- OpenAI now seeks $20B at $1.25T valuation, down from $30B at $1.4T, FT reports
- Nasdaq 100 fell 6.65% in October, worst month since March 2025
- UAE consortium including MGX to be largest investor with compute lease option

## Why it matters

The valuation cut shows how public-market pressure is reshaping private AI fundraising, even for the sector's leader, and signals tighter scrutiny of massive compute spending.

## Sources

1. [OpenAI IPO Valuation Target Reportedly Trimmed By $150B After Nasdaq 100 Registers Worst Month Since March 2025 Following Brutal Tech Sell-Off](https://finance.yahoo.com/markets/stocks/articles/openai-ipo-valuation-target-reportedly-113055028.html) (finance.yahoo.com, 2026-10-31)
2. [OpenAI cuts its funding round target to $20bn, FT reports](https://thenextweb.com/news/openai-funding-round-20bn-target-cut-ft) (thenextweb.com, 2026-10-31)

## Cite

Digest AI, "OpenAI cuts funding target to $20B at $1.25T valuation, FT reports", 31 October 2026, https://digestai.news/story/openai-cuts-funding-target-to-20b-at-1-25t-valuation-ft-reports

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