OpenAI valuation races past Elon Musk's SpaceX after $6.6-billion share sale
OpenAI has completed a deal that allowed current and former employees to sell about $6.6 billion shares in the company at a $500 billion valuation.
OpenAI has completed a deal allowing current and former employees to sell about $6.6 billion worth of shares in the company at a $500 billion valuation, according to a person familiar with the matter.
The secondary sale vaults the ChatGPT maker ahead of Elon Musk’s SpaceX to become the most valuable startup in the world. OpenAI was previously valued at $300 billion in a $40 billion financing round led by SoftBank Group Corp.
As part of the deal, OpenAI’s employees sold stock to a group of investors including Thrive Capital, SoftBank, Dragoneer Investment Group, Abu Dhabi’s MGX and T. Rowe Price, according to this person, who spoke on condition of anonymity as the information is private.
Bloomberg News previously reported on discussions for the secondary sale.
Representatives for OpenAI, Thrive Capital, SoftBank, Dragoneer, MGX and T. Rowe Price didn’t immediately respond to requests for comment.
Major US startups often negotiate share sales for their employees as a way to reward and retain staff, and also attract external investors. OpenAI is looking to leverage investor demand to provide employees with liquidity that reflects the company’s growth.
The total amount of eligible units sold in the secondary fell short of the $10 billion-plus worth of stock that the company allowed for sale, the person familiar said, which they interpreted as current and former employees demonstrating confidence in the long-term viability of the business.
OpenAI faces an increasingly competitive market for AI talent.
Meta Platforms Inc. has recruited researchers aggressively from OpenAI and other top labs for its new “super-intelligence” team, offering pay packages in the nine-figure range. A secondary sale could help OpenAI incentivise staff to stay at the company and turn down those lavish compensation offers.
