OpenAI just found out what happens when the AI boom meets a nervous stock market.
The company behind ChatGPT has reportedly cut the target for its latest funding round from $30 billion to $20 billion, after large investors gave the deal a cool reception. The Wall Street Journal reports that OpenAI has secured about $11 billion so far, which is less than half of the original target and well short of the new one. The figures have not been confirmed by OpenAI, and they come from reports citing people familiar with the matter, so they should be read as reported, not as the company's own numbers. Still, the direction is clear enough. The most talked-about AI company in the world is now asking for less money, at a lower valuation, than it was a few weeks ago.
The numbers kept shrinking
OpenAI was first reported to be raising $30 billion at a $1.4 trillion valuation, and then at a $1.25 trillion valuation, ahead of a planned public listing. The Financial Times reported on Friday that the company has since lowered its funding target to $20 billion, with a first close expected to come in even lower than that figure. A group of investors from the United Arab Emirates is expected to lead the round, according to the FT report, and a later retail offering for wealthy individuals could bring the total up to the $20 billion target. That retail piece matters, because it is the part of the plan that has to fill the gap left by large institutional investors. The Journal described the response from some of those large investors as tepid, which is a polite way of saying they did not rush to sign up.
Why investors went cool
TechCrunch linked the weaker response partly to timing, and the timing has not been kind. Wall Street investors have grown wary of heavy spending on AI infrastructure, which has helped drive a large sell-off in tech stocks in recent weeks. OpenAI sits at the center of that spending, because its models need vast amounts of computing power, and that computing power needs data centers and chips on a scale that is hard to picture. The same week brought other signs that the market is asking harder questions, with Anthropic's planned public listing also reported to face challenges. None of that proves that OpenAI is short of money to operate, and the reporting says nothing about its products, its API, or its customer commitments. It does show that raising money for AI is no longer a simple case of naming a number and watching investors line up.
What this does not mean, and what to watch
About $11 billion is still a very large amount of money, and a smaller target does not turn this into a collapse. OpenAI closed a funding round in March with $122 billion in committed capital at an $852 billion post-money valuation, according to a company post cited in later coverage, and it was reported in January 2025 to be in talks to raise up to $40 billion at a $340 billion valuation. The scale of those numbers has risen fast in less than two years, and the current round is being put together in a different market from the one that produced them. The reporting does not say what a smaller round would mean for training budgets, for the computing capacity used to serve model queries, or for hiring plans. Those are the questions that will matter most to people who build with OpenAI, and they are still unanswered.
The next test is the first close, and then the retail offering that is supposed to bring the total up to $20 billion. If those pieces land, the story will be that OpenAI raised a large round, just a smaller one than it first wanted, in a market that had turned cautious. If they do not, the story will be that even the best-known AI company cannot count on investors to fund its plans on its own terms. Either way, the message from the last few days is hard to miss. The AI boom is still running, but the money behind it is now being handed over with more questions and a closer look at the bill.
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Author: Blake Taylor
New York News Desk