OpenAI, the company behind ChatGPT, has officially become the most valuable startup in the world, with a staggering valuation of around $500 billion, according to Bloomberg.
This figure puts it ahead of Elon Musk’s SpaceX, currently valued at about $400 billion, and marks a sharp jump from OpenAI’s previous valuation of $300 billion earlier this year.
The milestone comes after a $6.6 billion share sale involving major investors, including SoftBank, Thrive Capital, Dragoneer, Abu Dhabi’s MGX, and T. Rowe Price. Notably, this was a secondary sale, meaning the funds went directly to existing shareholders rather than to OpenAI’s balance sheet. Industry watchers suggest the move is aimed at retaining top talent, especially as rivals like Meta (Facebook’s parent company) have reportedly offered multimillion-dollar bonuses to lure OpenAI engineers.
Profitability Still in Question
Despite its sky-high valuation, OpenAI is not yet turning a significant profit. In the first half of the year, the company generated $4.3 billion in revenue but also burned through $2.5 billion in cash.
Even so, the company is doubling down on its ambitions. OpenAI has announced plans to invest $300 billion over the next five years into building data centres, powered largely by Oracle’s cloud services. Additionally, Nvidia has pledged a $100 billion investment, further cementing its partnership with OpenAI to strengthen AI infrastructure.
Originally founded as a nonprofit, OpenAI has since restructured into a for-profit entity, thanks to a landmark deal with Microsoft, its biggest backer and partner.
