Deal Values OpenAI at a Sky-High $500B

OpenAI, the company behind ChatGPT, has surged to a $500 billion valuation, outpacing SpaceX and making it the world's most valuable startup. Bloomberg reports that in OpenAI's latest deal, current and former employees sold roughly $6.6 billion worth of their shares at that valuation to an investor lineup that includes Thrive Capital, SoftBank, Dragoneer, Abu Dhabi's MGX, and T. Rowe Price. It's a hefty leap from OpenAI's previous $300 billion valuation earlier this year. OpenAI is now the most valuable privately held company, with SpaceX valued at $456 billion, reports CNBC.

The sky-high valuation is a sign of the tech world's relentless appetite for artificial intelligence. OpenAI, led by CEO Sam Altman, sits at the vanguard of an industry-wide race involving colossal investments in data centers and AI services—a race that's expected to cost trillions. While OpenAI is yet to show a profit, it's already inked major deals with giants like Oracle and SK Hynix, helping fuel the current infrastructure surge, Bloomberg reports.

The company's rapid ascent comes as it negotiates a potentially transformative deal with Microsoft to shift from its nonprofit roots to a more traditional for-profit structure. Founded in 2015 with the mission to "benefit humanity," OpenAI's pivot has ruffled feathers, most notably Elon Musk's. The Tesla and SpaceX CEO, who co-founded OpenAI but left the board in 2018, is suing to halt the transition, alleging the company has strayed from its original purpose since partnering with Microsoft. On top of the corporate drama, OpenAI is now in a fierce talent war, with competitors like Meta dangling enormous paychecks to lure top researchers. (Coincidentally, Musk's net worth has just hit $500 billion.)