OpenAI becomes the world’s most valuable private company at $500 billion

OpenAI has surged to a $500 billion valuation following a major secondary share sale, surpassing Elon Musk’s SpaceX to become the world’s most valuable startup. The deal marks a pivotal moment for the artificial intelligence leader as it deepens ties with major investors and navigates a rapidly evolving AI landscape.

Current and former OpenAI employees sold approximately $6.6 billion worth of stock in the deal, according to a person familiar with the transaction. Investors included Thrive Capital, SoftBank Group Corp., Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price. The transaction pushed OpenAI’s valuation well beyond the $300 billion figure set earlier this year during a SoftBank-led funding round.

The meteoric rise reflects surging investor enthusiasm for AI-driven companies. Sam Altman’s OpenAI, backed heavily by Microsoft, is at the forefront of a global effort to build out AI infrastructure, a task expected to require trillions of dollars in capital. Despite not yet turning a profit, OpenAI is “helping fuel that infrastructure boom by inking mega-sized deals with the likes of Oracle Corp. and SK Hynix Inc.”

Founded in 2015 as a nonprofit, OpenAI’s mission was to advance artificial intelligence “in the way that is most likely to benefit humanity as a whole.” That founding philosophy remains central as the organization transforms a more traditional for-profit model. Under the proposed changes, OpenAI’s nonprofit arm will maintain control over a new public benefit corporation.

The company’s direction has not come without controversy. Musk, one of OpenAI’s original co-founders, has sued to block the restructuring. He alleges that OpenAI abandoned its original mission when it accepted billions in funding from Microsoft in 2019, a year after Musk resigned from its board. “He claims it abandoned its founding purpose when it accepted billions of dollars in backing from Microsoft starting in 2019, the year after he left OpenAI’s board.”

The share sale is also seen as a strategic move to retain top talent. As competition for AI researchers intensifies, especially from firms like Meta Platforms Inc. offering pay packages in the nine-figure range, OpenAI is looking to provide liquidity to staff instead of immediate profits. “A secondary sale could help OpenAI incentivize staff to stay at the company and turn down those lavish compensation offers.”

Notably, the full $10 billion in available stock wasn’t sold in the secondary sale. “That could mean current and former employees are demonstrating confidence in the long-term viability of the business,” said the person familiar with the matter.

OpenAI has responded to rising competition from Google to Anthropic by ramping up product launches. Its release of GPT-5 in August, alongside open-source models mimicking human reasoning, aims to maintain its leadership in a sector crowded with fast-growing challengers. These innovations come months after China’s DeepSeek made headlines with its own open AI offerings.

As OpenAI accelerates its global push, its $500 billion valuation is a sign of confidence in both its technological edge and its capacity to reshape entire industries—despite ongoing internal and external challenges.