OpenAI Lowers Fundraising Target as Meta Faces Negative Outlook from S&P

OpenAI announced a cut to its latest fundraising round, lowering the target to $20 billion and its projected valuation to $1.25 trillion, down from $30 billion and $1.4 trillion respectively, according to sources cited by the Financial Times. The move comes as rival Anthropic prepared to go public, filing an S-1 that showed rising revenue and positive cash flow in the first half of the year.

The fundraising adjustment coincided with a broader market downturn for technology stocks. Alphabet reported deeper negative cash flow for the third quarter, and its shares fell about 12 % on Thursday, marking the company’s worst day on record. Microsoft posted strong cloud growth and remained cash-flow positive, while AI chip maker SK Hynix exceeded earnings expectations.

S&P Global responded to the deteriorating environment by changing its outlook on Meta from “stable” to “negative” late Friday. The agency kept Meta’s credit rating at AA- but warned that leverage could rise to 1.0 times as early as 2027, up from roughly 0.1 times in 2025, primarily because of the company’s strategy of leasing data-center capacity. S&P projects Meta’s capital spending to reach $140 billion this year, $225 billion in 2027 and $252 billion in 2028, with free operating cash flow remaining negative through 2028.

“While we believe the company intends to monetize these investments via improved advertising tools that support faster ad revenue growth, as well as from the development of new revenue streams stemming from its introduction of agentic apps such as Muse, it is unclear when these revenue streams will generate material contributions that exceed their rising costs over the next few years,” S&P said.

A Meta spokesperson disputed the assessment, citing “significant product and business opportunities” and stating that AI investments are already delivering stronger engagement, better recommendations and higher returns for advertisers. The spokesperson added that the company’s technology and infrastructure are expected to create new revenue streams and long-term shareholder value.

Analyst Ed Yardeni noted that the AI investment boom faces financial, physical and political constraints, but argued that such pressures could improve the durability of the sector by encouraging more efficient capital allocation. He expects hyperscalers to maintain financing access due to strong balance sheets and sees potential buying opportunities if AI-related market jitters persist.