OpenAI IPO: funding target cut to $20B and valuation to $1.25T as AI stocks slide

The road to an OpenAI IPO just got a little steeper. The ChatGPT maker has cut its latest funding target by $10 billion, to $20 billion, and lowered the valuation it is asking for from $1.4 trillion to $1.25 trillion, the Financial Times reported on October 30. Some investors scaled back how much they planned to put in, and the first close is now expected to come in below even the reduced $20 billion. The Wall Street Journal reported the same day that OpenAI raised less than half of its original $30 billion goal. OpenAI did not comment.

Image: Jernej Furman / Wikimedia Commons (CC BY 2.0)

What changed in OpenAI's funding round?

The round began big. In late September, Bloomberg reported that OpenAI was seeking at least $30 billion at a $1.4 trillion pre-money valuation, a "bridge" round meant to carry the company until it goes public. Investors had until Friday, October 30, to commit.

By the deadline, the terms had moved:

• Money sought: $30 billion → $20 billion, per the FT.
• Valuation: $1.4 trillion → $1.25 trillion, a cut of $150 billion.
• Money likely raised at first close: below $20 billion, per the FT; under half of $30 billion, per the WSJ.

Even the lower price is far above OpenAI's last completed round. In March 2026 it raised $122 billion at an $852 billion valuation, according to Bloomberg and CNBC.

Chart: NextDiff, from figures reported by Bloomberg, the FT, the WSJ and CNBC

Why did investors pull back?

Timing. The cut landed in the middle of a sharp sell-off in US tech stocks. According to Investing.com's report on the FT story, the Nasdaq Composite fell 2.9% on October 30 and closed 7.8% below its record high of October 6. Investors are questioning whether the hundreds of billions that Alphabet, Amazon, Meta and Microsoft are spending on AI data centres will pay off, and a private AI lab priced at more than a trillion dollars is exposed to the same doubt.

There is also more competition for the same cheques. OpenAI and Anthropic draw on overlapping groups of large institutional investors, the FT notes, and OpenAI wanted its round done before Anthropic's public listing.

How it works: why a private round matters for the IPO

Before a company lists, its last private round sets the reference price. Public investors compare the IPO price with what insiders recently paid. A round that closes small, or at a lower valuation, tells the market that even sophisticated private buyers would not pay the original asking price. A lower private mark can also make the eventual IPO easier: shares that list near or above the last private price look like a win, not a write-down.

When is the OpenAI IPO?

There is no date. OpenAI confidentially filed a draft S-1 registration statement with the SEC in June 2026, a little over a week after Anthropic did the same. Sam Altman later called a listing this year "ill-advised", and reports since then point to 2027 at the earliest. A confidential filing lets the SEC review the paperwork privately; the full numbers only become public when the company files openly, as Anthropic did.

Image: Nasdaq MarketSite, ajay_suresh (CC BY 2.0)

Why it matters

For two years the AI trade ran on one assumption: the leading labs could raise whatever they asked. This is one of the first clear signs of price discipline at the very top. OpenAI is still on track to raise more in one round than most companies ever do, but at a lower price and with less money than it wanted.

It also sets up a direct test. Anthropic filed a public S-1 on October 26 and is expected to list on Nasdaq as ANT in mid-November. Read our breakdown of Anthropic's IPO filing. How that listing trades will shape what public investors are willing to pay for OpenAI next year.

What's next

Watch for three things: the final size of OpenAI's first close, whether more investors join at the $1.25 trillion price before a second close, and Anthropic's pricing in November. This article is news coverage, not investment advice.

Disclosure: NextDiff uses Anthropic's Claude in parts of its publishing workflow.