OpenAI has cut the target for its latest funding round by $10 billion, to about $20 billion, the Financial Times reported on Friday, October 30, as a sharp drop in AI-linked stocks led some investors to reduce their commitments. The company is now seeking roughly $20 billion at a $1.25 trillion valuation, down from about $30 billion at a $1.4 trillion valuation discussed a month earlier. It is the clearest sign yet that the market mood around AI financing has turned cautious even as the companies keep spending.
The retreat followed a bruising week for the largest AI investors on the public markets. Alphabet shares fell a record 12.64 percent on Thursday, wiping out about $482 billion in market value, and slipped a further 0.42 percent in Friday pre-market trading, after quarterly earnings sharpened investor anxiety over whether heavy AI spending will generate adequate returns. A Bloomberg technology editor said disappointing Big Tech results were intensifying those doubts, with Alphabet and Intel under particular pressure.
The capital that AI firms have committed runs far ahead of their current revenue, and that gap is now the market's central worry. Microsoft is offering voluntary severance to about 60,000 employees, roughly a quarter of its workforce and its second such program this year, according to reports; its headcount has held near 223,000 since 2022 even as it plans to spend about $170 billion on AI infrastructure in 2026 alone. Alphabet's parent is likewise pouring money into AI capacity while the outlay weighs on cash flow and AI-powered search raises questions about its advertising business.
Anthropic, OpenAI's closest rival, is feeling the same pressure from a different direction. Blackstone, the anchor investor in a $63 billion deal to fund Anthropic's chips, told investors that Anthropic is expected to receive a double-B credit rating, at the top of speculative or "junk" grade, once it goes public, the Financial Times reported. Blackstone had previously predicted an investment-grade rating. A junk rating makes borrowing harder and more expensive, which matters for a company paying for a string of large compute deals signed over the past year.
The timing sits awkwardly against Anthropic's own filings. As AI Daily reported, Anthropic filed to go public on October 26 with half-year revenue of $16.3 billion but at least $265.6 billion in guaranteed compute commitments, obligations that dwarf its income and run up to 20 years out. OpenAI faces the same structure: it has signed enormous long-dated deals for chips and data centres that assume demand will keep climbing for years. When investors grow doubtful about returns, as they did this week, the cost of financing those bets rises for everyone at once.
What remains open is whether this is a repricing or a turn. None of the spending plans have been cancelled, and OpenAI is still raising roughly $20 billion; the cuts are to ambition, not activity. The question the week leaves unanswered is whether the market is simply trimming valuations that had run ahead of the fundamentals, or beginning to doubt the premise that today's AI capital expenditure will ever pay for itself.