OpenAI Eyes $500B Valuation, Surpassing SpaceX Amid Talent Wars
OpenAI, the trailblazing developer behind ChatGPT, is reportedly in advanced discussions to facilitate a significant sale of shares held by its current and former employees. This transaction, if finalized, would catapult the company’s valuation to an astonishing half a trillion dollars, or $500 billion, marking a two-thirds increase from its previous $300 billion valuation. Such a figure would place OpenAI’s market worth above that of Elon Musk’s aerospace venture, SpaceX, which is currently valued at $350 billion and is said to be eyeing a $400 billion price tag in its own upcoming fundraising round.
Sources close to the matter, including Bloomberg, indicate that existing investors, among them Thrive Capital, have approached OpenAI regarding the purchase of these employee shares. Other notable investors in the San Francisco-based AI powerhouse include Japanese investment giant SoftBank, which previously spearheaded a $300 billion financing round, and Microsoft, a key strategic partner. Employee share sales are a common mechanism in the tech startup world, serving to both incentivize staff and attract further investment.
This strategic move comes amidst intense competitive pressures for OpenAI, particularly in the race to secure top talent. Mark Zuckerberg’s Meta, the parent company of Facebook, has been aggressively poaching staff from OpenAI and other AI firms as it builds its own “superintelligence” unit. Despite reports of Meta offering “crazy” signing bonuses, some as high as $100 million, OpenAI CEO Sam Altman has maintained that Meta has not managed to attract “any of our best people.” The proposed share sale could, therefore, serve as a powerful incentive for staff to remain with OpenAI.
The need for continuous fundraising is a pervasive reality for AI startups, driven by the immense capital required to train increasingly sophisticated models. This process demands vast quantities of expensive computer chips and extensive data center capacity. OpenAI’s rival, Anthropic, founded by former OpenAI employees, is also reportedly in negotiations for a fundraising round that could value its business at $170 billion, underscoring the high stakes and financial demands within the burgeoning AI sector.
Amidst these financial maneuvers, OpenAI continues to push the boundaries of AI development. CEO Sam Altman recently hinted at the imminent release of an upgraded version of the model powering ChatGPT, sharing a screenshot that appeared to showcase the company’s latest AI iteration, GPT-5. Furthermore, OpenAI recently launched two new “open” models, which can be freely downloaded and customized, directly challenging similar offerings from Meta and China’s DeepSeek. Altman expressed enthusiasm for making these models, the result of billions of dollars in research, available to the world to democratize AI access. While these open models expand reach, OpenAI’s primary business model relies on “closed” models, whose internal workings are proprietary, generating revenue through subscriptions for enhanced ChatGPT versions and enterprise integrations.
Beyond its core software offerings, OpenAI is also expanding into hardware. The company recently acquired io, a startup founded by iPhone designer Sir Jony Ive, in a substantial $6.4 billion deal. Altman has reportedly shared ambitious plans with employees to build 100 million AI “companions” that would seamlessly integrate into users’ daily lives. While mass production of the unnamed io gadget is not anticipated before 2027, Altman has described an early prototype as “the coolest piece of technology that the world will have ever seen.”
These developments unfold as OpenAI navigates a complex organizational transition. Structured initially as a non-profit entity with a profit-making arm, the company has been engaged in long-running negotiations to become a fully for-profit business. These discussions have reportedly involved some wrangling with Microsoft, though Altman, speaking in June, characterized the relationship as “wonderfully good for both companies” despite “points of tension.” This shift towards a for-profit model has drawn criticism from co-founder Elon Musk, who departed OpenAI in 2019. Musk has accused the startup of deviating from its founding mission to develop artificial intelligence for the benefit of humanity, rather than for corporate gain. A US judge in March denied Musk’s request for a preliminary injunction to halt OpenAI’s transition to a for-profit model, clearing the path for its commercial ambitions.