OpenAI, the creator of ChatGPT, has overtaken Elon Musk’s SpaceX to become the world’s most valuable startup, after a share sale pushed its valuation to $500 billion.
The deal saw current and former OpenAI employees sell about $6.6 billion worth of shares to a group of high-profile investors, including Thrive Capital, SoftBank, Dragoneer Investment Group, Abu Dhabi’s MGX, and T Rowe Price, according to Reuters.
SpaceX, Musk’s rocket and satellite company, is currently valued at $400 billion, placing it behind OpenAI for the first time.
The latest secondary sale cements OpenAI’s position as the most highly valued startup in the world, underscoring investor confidence in the transformative potential of generative AI.
OpenAI has grown rapidly since launching ChatGPT in late 2022, which became the fastest-growing consumer app in history and has since been integrated into Microsoft products, enterprise software, and countless business processes worldwide.
In the first half of this year, OpenAI reported revenue of around $4.3 billion, already exceeding its entire 2024 performance by 16%. The company is now on track to hit a full-year revenue target of $13 billion.
However, the scale of OpenAI’s ambition comes with significant costs. The company booked an operating loss of $7.8 billion due to heavy spending on research, development, and infrastructure to support its advanced AI models.
Despite the losses, investors remain bullish on OpenAI’s long-term prospects. The company is seen as central to the global AI race, with applications in everything from productivity software and search to healthcare, education and customer service.
The $500bn milestone also reflects the appetite for AI-driven disruption across industries, even as regulators in the US, UK and EU weigh how best to oversee the sector.
With OpenAI now ranked above SpaceX, Stripe and other decacorns, the company’s valuation places it in rarefied air, comparable to some of the world’s biggest publicly listed technology firms.