OpenAI has cut the target for its latest funding round by $10bn, to about $20bn. The Financial Times reported the cut on Friday 30 October, citing people with knowledge of the matter. Some investors reduced their commitments as AI stocks sold off, according to the report.

The round values OpenAI at $1.25tn. The company had first pitched $30bn at $1.4tn, then cut the valuation last week. TNW has not independently verified the report.

A first close below $20bn

OpenAI set Friday as the deadline for investors to commit, the FT reported. The first close will likely raise less than $20bn.

OpenAI has raised less than half of the $30bn it first sought, people familiar with the matter told the Wall Street Journal.

Investors from the United Arab Emirates, including the state-backed fund MGX, will likely be the largest backers, according to the FT. As part of the deal, OpenAI would get the option to lease new computing capacity in the region.

Founders Fund, Coatue, Sequoia Capital and Andreessen Horowitz also plan to invest, the FT reported. Wealthy individuals can buy in later through a retail offering at the same $1.25tn valuation.

OpenAI, MGX, Coatue, Sequoia and Andreessen Horowitz did not immediately respond to Reuters, which could not reach Founders Fund.

Ahead of Anthropic

OpenAI plans to list in 2027. It wants to close the round before Anthropic lists, because the two companies draw on similar investors, Reuters has reported. Anthropic made its IPO filing public on Monday.

The cut comes after a week of falls in AI stocks. The Nasdaq fell 2.9% on Friday, Reuters reported. It now sits 7.8% below its record close on 6 October. Alphabet’s shares fell 12% on Thursday after its results.