ChatGPT creator OpenAI has achieved a $500 billion valuation after selling shares worth $6.6 billion held by current and former employees. This makes OpenAI the world’s largest privately held startup, surpassing Elon Musk’s SpaceX valuation of $400 billion.
The investors included SoftBank Group, Thrive Capital, Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price. The sale comes just months after OpenAI’s previous $40 billion funding round that valued the startup at $300 billion, doubling its worth in under a year.
OpenAI’s surge in valuation comes at a time when both users and revenue are experiencing similar growth. Though the company is yet to post a profit, it generated $4.3 billion in revenue in the first half of 2025 alone. A 16% increase over full-year revenue in 2024. Their latest AI products, like the GPT-5 model and the new Sora 2 video AI model have helped expand OpenAI’s market presence significantly.
On the infrastructure side, OpenAI has committed $300 billion over the next five years to Oracle’s Cloud Services, while Nvidia has pledged a strategic investment of $100 billion to support their development.
The Battle for Talent
The $6.6 billion sale was a liquidity event for employees and stakeholders. Platforms like Meta, Google, and Anthropic have launched aggressive hiring campaigns, including offering multimillion-dollar signing bonuses, challenging OpenAI for the best AI researchers worldwide.
This share sale enables OpenAI to reward staff and incentivize their continued commitment amid aggressive headhunting by competitors. Despite authorizing over $10 billion worth of stock for potential sale on the secondary market, only about two-thirds was traded, suggesting sustained investor appetite.
Originally founded as a nonprofit entity in 2015, OpenAI is engaged in negotiations to convert into a traditional for-profit corporate structure under a public benefit corporation model, a move designed to unlock more flexible fundraising and operational avenues.
However, the transition is not without controversy. Elon Musk, one of OpenAI’s original co-founders, has publicly opposed this move, expressing concern that OpenAI has strayed from its original mission by partnering closely with tech giants like Microsoft. Microsoft’s involvement includes both investments and collaboration on AI deployments, making it a key ally in OpenAI’s growth trajectory.
Scaling in a Competitive Market
OpenAI faces pressure from major technology firms like Google, Meta, and emerging AI startups like Anthropic. Each vies for dominance by aggressively poaching talent and investing heavily in research and product development.
While OpenAI’s valuation and revenue growth are impressive, analysts remain cautious about its profitability outlook. The company’s commitment, like the $300 billion five-year deal for Oracle cloud infrastructure tells us about the immense costs involved.
“You should expect OpenAI to spend trillions of dollars on things like data centre construction in the not-too-distant future. You know what? Let us do our thing,” said Sam Altman.
Financial experts expressed the importance of OpenAI translating its technological breakthroughs into sustainable business models, able to generate consistent profits beyond one-off funding surges or private transactions.
