OpenAI becomes the world’s most valuable private company after new share sale OpenAI has surpassed SpaceX to become the largest and most valuable private startup globally. A recent secondary share sale has boosted the companys valuation to a staggering 500 billion dollars. This marks a significant jump from its previous 300 billion dollar valuation. The share sale allowed current and former employees to sell their stock. While the company authorized the sale of 10.3 billion dollars in shares, it ultimately sold 6.6 billion dollars worth to a group of prominent investors. These investors include Softbank, the Abu Dhabi governments MGX fund, the American investment firm Thrive Capital, and global investment management firm T. Rowe Price. This new valuation firmly places OpenAI at the top of the private company leaderboard. It has overtaken Elon Musks SpaceX, which is valued at 400 billion dollars, and the developer of TikTok, ByteDance, which holds a 220 billion dollar valuation. This financial milestone comes as OpenAI is in the process of a major structural transition. The company is moving to become a Public Benefit Corporation, or PBC, which will be controlled by its original nonprofit arm. As part of this shift, the nonprofit division received an equity stake valued at over 100 billion dollars, making it a major shareholder in the new for-profit entity. This move has not been without controversy. SpaceX CEO Elon Musk, who was one of OpenAIs original founders and provided its early funding, has become one of the most vocal critics. Musk has taken legal action in an attempt to block OpenAIs for-profit transition. He claims in court that OpenAI and its chief, Sam Altman, are breaking their contract with him and violating the companys founding mission to develop artificial intelligence for the benefit of humanity. OpenAI believes that the new PBC structure will make it more attractive to investors by removing caps on potential financial returns. The company has a massive need for capital. Sam Altman has previously stated his intention to spend trillions of dollars on building out the data centers required to power future artificial intelligence services. This record-breaking valuation provides a fresh injection of capital as the company pursues its ambitious and costly goals.
