At a time when AI sell-offs are sweeping the market, it is rumored that OpenAI's financing targets have been cut by more than 30% and valuations have been lowered simultaneously

The Zhitong Finance App learned that according to people familiar with the matter, the artificial intelligence company OpenAI has cut its target size in the latest round of financing by $10 billion and is currently seeking to raise $20 billion at a valuation of 1.25 trillion US dollars. The company said last month that it aims to raise $30 billion at a valuation of $1.4 trillion.

Three levels of financing negotiations within a month

The terms of this round of negotiations continued to decline over the course of a month. In mid-October, it was reported that OpenAI was promoting financing of about 30 billion US dollars, with a valuation of more than 1.4 trillion US dollars. SoftBank Group, Abu Dhabi investment institution MGX, and other existing investors were discussing participation at the time; due to an unusually tight schedule, the company had intensive meetings with long-term funds and sovereign wealth funds last week. Around October 22, several media reported that the asking valuation price had dropped to 1.25 trillion US dollars, about 150 billion US dollars less than the initial asking price; this week's reports showed that UAE funds and cross-market hedge fund Coatue Management are close to dominating this round of investment. By Friday, the media confirmed not only that valuations had shrunk — even the fundraising target itself had been cut from $30 billion to $20 billion.

Grab time: just before Anthropic hits the market

People familiar with the matter said at the time that OpenAI is accelerating partly because it wants to lock in investor promises before rival Anthropic plans an IPO in mid-November — two cutting-edge labs are vying for the same batch of institutional funding. OpenAI was originally scheduled to launch its listing in early 2027. The company previously stated that it needs to enrich its balance sheet first to deal with the risk that the IPO market deteriorates further and the listing plan will be delayed.

Where Is the Money Going: Closing the Computing Power Promise Gap

Funding pressure comes from the company's spending commitments. According to internal investor documents, OpenAI anticipates a cumulative free cash flow gap of about US$278 billion from 2026 to 2030, which is more than double the US$122 billion financing commitment in the March round; the total nominal computing power and data center agreements signed in the past 15 months exceeds US$1.4 trillion, which is about 35 times its current annualized revenue, including a five-year computing power contract with Oracle totaling 300 billion US dollars. The document also predicts that the company will not be able to correct its cash flow until around 2030.

OpenAI tells investors that growth is accelerating: the company says annualized revenue has reached $50 billion and is expected to rise to $70 billion by the end of the year. However, behind these two figures are two sets of metrics — according to investor documents obtained by the Financial Times in early October, the annual net revenue as of the end of September was about 50 billion US dollars, based only on OpenAI's own share of revenue; the figure of about 70 billion included the total amount of cloud partner sales, adjusted for Anthropic. When the gap between the two calibers came to light in early October, AI-related stocks and semiconductor stocks fluctuated for a while.

The market is repricing AI financing

This round of contraction occurred at a time of drastic repricing of AI transactions in the open market: the Nasdaq 100 index fell 6.7% in October, the worst month since March 2025; computing power operators such as CoreWeave and Nebius fell more than 30% during the month; credit protection costs for companies with high capital expenditure collectively hit a new high on the same day. In contrast to OpenAI's collapse in the private equity market, Anthropic's prospectus calmed the market with concentrated data such as “79% of revenue from outside the top five customers,” and its IPO is still progressing according to plan. Private equity giants bargaining and public equity prudent subscriptions point to the same problem: the payback cycle of huge AI capital expenses is being re-examined by all funding parties. For OpenAI, the shrinking funding target also means it needs room for the next round before revenue catches up with spending promises.