OpenAI World’s Most Valuable Private Company

OpenAI has reportedly reached a $500 billion valuation after completing a $6.6 billion secondary share sale involving current and former employees.

Share Sale

The transaction, finalised on 2 October, allows OpenAI workers and alumni to sell their equity stakes to a group of institutional investors including Thrive Capital, SoftBank, Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price. The valuation, based on the deal pricing, makes OpenAI the most valuable privately held company in the world, thereby even overtaking Elon Musk’s SpaceX.

What The Transaction Involved

Unlike a traditional fundraising round where capital is injected into the business, this was a secondary share sale, meaning the money went directly to eligible employees and former employees who had held equity for at least two years. The move provided liquidity without OpenAI going public, while still attracting long-term investors to increase their exposure.

Up To $10.3 Billion

OpenAI had reportedly authorised up to $10.3 billion worth of stock for sale, though around two-thirds of that was ultimately sold. According to various reports, e.g. by the likes of Bloomberg and CNBC, the lower participation rate is being viewed internally as a sign of confidence in the company’s future, with many employees choosing to hold onto their equity at the new, higher valuation.

Second Of Its Kind This Year

This is the second major employee-focused share sale OpenAI has conducted in under a year. For example, a previous deal in November 2024 saw SoftBank purchase around $1.5 billion of stock from OpenAI employees.

Why It Matters And Why Now

The $500 billion valuation represents quite a significant increase from OpenAI’s last primary funding round in early 2025, which raised $40 billion at a $300 billion valuation. Many of the same investors returned for the latest deal, thereby appearing to reinforce their commitment to the company’s long-term growth.

The timing appears to reflect multiple overlapping objectives for OpenAI. For example:

Keeping hold of top AI talent, as companies like Meta and Google DeepMind continue to offer extremely high salaries to attract researchers. Meta reportedly hired at least seven senior OpenAI engineers earlier this year, with offers reaching into nine figures.

Giving employees a way to cash out some of their shares without OpenAI having to go public. Other large tech firms like Stripe, Databricks, and SpaceX have used similar share sales to reward staff while staying private.

Showing that investors are still backing the company, even at a much higher valuation than earlier this year. The sale actually gives OpenAI a fresh benchmark and highlights continued demand from long-term backers as it pushes ahead with major infrastructure plans.

Growing Fast But Spending Aggressively

Even though OpenAI is currently growing fast, it is also spending aggressively. For example, the company reported $4.3 billion in revenue in the first half of 2025 alone, but is also understood to have burned through $2.5 billion in cash over the same period.

It’s worth noting that much of this is being invested in the systems and infrastructure needed to run and train its AI models at scale. OpenAI has reportedly committed to spending $300 billion over five years on Oracle cloud services, and recently signed a letter of intent with Nvidia for an even larger strategic deal. According to Nvidia CEO Jensen Huang, the partnership will involve building 10 gigawatts of AI infrastructure capacity and could be worth up to $100 billion.

These numbers are unmatched by any other AI company and significantly exceed OpenAI’s current revenues and reserves. However, the scale of the infrastructure plan is seen as necessary if the company is to maintain its lead in large language models, video AI (such as the recently launched Sora 2), and enterprise platform offerings.

Microsoft, Governance, And Control

The share sale comes shortly after OpenAI announced a non-binding memorandum of understanding with Microsoft, its largest strategic partner, to support the company’s proposed conversion into a Public Benefit Corporation (PBC). If approved, this would move OpenAI’s for-profit operations into a new corporate structure in which its original non-profit would hold a controlling stake and retain final say on its mission and direction.

Chairman Bret Taylor described the change as a way to preserve OpenAI’s founding principles while enabling long-term commercial success. As he wrote in a public statement, “OpenAI started as a nonprofit, remains one today, and will continue to be one”. It seems that the new structure is designed to align the business’s growth with public-interest goals, but the transition still needs to be ratified by regulators and stakeholders, and is not yet legally confirmed.

This uncertainty means the governance model remains a point of concern for some observers. In particular, it raises questions about investor rights, accountability, and how decisions are made when commercial and ethical priorities diverge.

Competitors

The valuation is bound to send a strong message to the broader AI sector. For example, at $500 billion, OpenAI is now worth more than SpaceX, and far ahead of rivals such as Anthropic, xAI, Cohere, and Mistral. While this provides a benchmark for others raising capital, it’s also likely to intensify pressure across the market.

Clearly, companies building competing foundation models now face an even more aggressive funding environment. Talent retention and access to compute resources are already competitive, and OpenAI’s ability to reward employees with liquidity and attract deep-pocketed investors could make those gaps wider.

At the same time, other AI players may benefit from investor interest spilling over. Several large funding rounds have taken place in 2025 already, and OpenAI’s valuation may increase attention on smaller but promising firms developing more specialised or safety-focused models.

Business Users And Partners

For enterprise users of OpenAI’s product, including ChatGPT Enterprise, the API platform, and integrations via Microsoft Azure, the sale is more than symbolic. For example, if infrastructure build-outs proceed as planned, customers could see faster development of new model capabilities, better service availability, and reduced latency. The ongoing partnerships with Microsoft and Oracle also suggest continued alignment between OpenAI’s roadmap and enterprise delivery platforms.

However, the sheer scale of OpenAI’s commitments and its growing dependence on just a few suppliers and investors looks likely to introduce complexity. Many of its largest deals now involve overlapping roles. For example, Nvidia is both a supplier of hardware and a major investor, while Microsoft is both a partner and a platform.

This has already attracted attention from regulators concerned about market concentration and fair access to compute. Antitrust scrutiny of vertical integration in AI is increasing, particularly in the US and Europe.

Benefits And Tensions

Of course, the share sale offers immediate financial benefits to those who helped build OpenAI in its early stages. For example, many current and former employees have now been able to realise part of their equity gains without waiting for an IPO.

For investors, the transaction provides greater access to a company widely seen as the frontrunner in general-purpose AI. SoftBank, Thrive Capital, and other returning backers have all increased their exposure despite the steep rise in valuation since earlier in the year.

Strategic partners also stand to gain from closer alignment. Microsoft, in particular, stands to benefit from continued integration of OpenAI’s models across its Azure cloud services, Office products, and developer tools.

That said, many challenges remain. For example, the company’s rapid growth, mounting costs, structural complexity, and competition for talent all present ongoing risks. With no confirmed path to IPO, and no public financial statements, some analysts are also questioning how sustainable a $500 billion valuation will prove if revenue growth slows or infrastructure plans are delayed.

Others have also highlighted the potential conflict between mission and commercial goals, especially as the company works to convert its structure while navigating regulatory and competitive headwinds.

What Does This Mean For Your Business?

OpenAI’s record-breaking share sale and resulting valuation are likely to send a clear message to investors, rivals, regulators, and customers alike. At $500 billion, the company is now operating at a scale where its decisions carry weight well beyond the AI sector. While the transaction did not raise new capital for OpenAI directly, it has strengthened relationships with major long-term investors, helped reward and retain key staff, and established a new private market benchmark that will likely influence how other companies in the space are valued and funded.

The scale of the valuation is also likely to shape expectations, particularly around delivery of OpenAI’s ambitious infrastructure commitments and the pace of future product development. The company is positioning itself as a central player in the next wave of general-purpose computing, but its ability to deliver depends heavily on partnerships that now blend commercial, financial, and strategic interests in complex ways. That convergence may enable faster execution, but it also increases the concentration of influence and raises questions about resilience and independence.

For UK businesses, the implications are already being felt. For example, many are now embedding OpenAI-powered tools into internal workflows, customer services, and development environments via Microsoft Azure, GitHub Copilot, or ChatGPT Enterprise. As OpenAI expands its model range and infrastructure footprint, UK firms could benefit from improved access, better availability, and deeper integrations with mainstream business software. However, they also face growing dependencies on a relatively narrow set of providers. With regulators in both the UK and Europe now examining the market power of foundation model developers, these relationships may soon come under greater scrutiny.

What comes next will depend not just on OpenAI’s growth but also on how it navigates governance reform, revenue pressure, regulatory demands, and increasing competition from well-funded challengers. The share sale has delivered liquidity, signalled strength, and reinforced investor appetite, but it also raises the stakes. As the company continues to scale, each strategic decision is likely to face greater scrutiny, both from those building with its tools and those watching what its influence means for the wider market.