OpenAI Staffers to Sell $6B Stock; Valuation Hits $500B

Current and former employees of OpenAI are poised to sell approximately $6 billion worth of shares to a consortium of investors, including Thrive Capital, SoftBank Group Corp., and Dragoneer Investment Group. This significant secondary transaction places an impressive $500 billion valuation on the creator of ChatGPT, according to sources familiar with the ongoing discussions.

This employee share sale represents a pivotal moment for the artificial intelligence titan, underscoring the immense private market appetite for its stock. It is crucial to distinguish this secondary share investment, where existing shares change hands between employees and new investors, from primary funding rounds, which inject fresh capital directly into the company for operational expansion and research.

Notably, this $500 billion valuation for the secondary sale stands distinct from another major investment initiative. SoftBank, a key participant in the employee share purchase, is also leading a separate $40 billion funding round for OpenAI, which values the company at a more conservative $300 billion. This primary funding round remains in progress, with OpenAI recently securing $8.3 billion from a diverse syndicate of investors. The divergence in valuations between the primary funding round and the secondary market transaction highlights the dynamic and often higher demand for existing shares in a highly sought-after private company, where investors may be willing to pay a premium for immediate access to equity.

Sources close to the negotiations caution that these discussions are in their preliminary stages, and the ultimate size of the share sale could still fluctuate. Nevertheless, the sheer scale of the proposed transaction, coupled with the participation of prominent investment firms, signals robust confidence in OpenAI’s trajectory and its pivotal role in shaping the future of artificial intelligence. It also offers a substantial liquidity event for many of the company’s early contributors, allowing them to realize significant returns on their equity.