WASHINGTON (dpa-AFX) - After a $6.6 billion secondary share sale involving both current and former employees, OpenAI has reached a $500 billion valuation, according to Bloomberg.
With the transaction, OpenAI surpasses valuations previously set by tech giants at comparable stages of growth to become the most valuable privately held company in history.
SoftBank, Thrive Capital, Dragoneer Investment Group, MGX, and T. Rowe Price were among the buyers in the deal. Profits from the sale went to shareholders rather than OpenAI itself, in contrast to a traditional funding round.
However, the sale helps the company's retention efforts as it contends with growing competition from rivals like Meta. At least seven of the top OpenAI engineers were enticed to join Meta this summer with multimillion-dollar signing bonuses.
With support from SoftBank, Thrive, T. Rowe Price, Dragoneer, Blackstone, TPG, Founders Fund, Sequoia, and Andreessen Horowitz, OpenAI closed a $40 billion round at a $300 billion valuation in August.
With a $300 billion investment in Oracle Cloud Services over the next five years, the company is also getting ready for significant capital requirements. As part of a strategic partnership that was announced in September, Nvidia has committed $100 billion.
The secondary sale's timing is noteworthy because it occurred just weeks after OpenAI and Microsoft reached a non-binding agreement that may allow OpenAI to become a for profit company, a process that has not yet been completed in court. If legal approval is delayed, the new sales may make that conversion more difficult.
With the release of its most recent Sora 2 video model and social media platform earlier this week, OpenAI is still growing rapidly.
In the first half of 2025, the company's reported revenue of $4.3 billion was offset by $2.5 billion in cash burn.
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