OpenAI Valuation: Now World's Most Valuable Private Company

OpenAI Share Sale Reaches $6.6 Billion

A recent Bloomberg report details a substantial sale of OpenAI shares, totaling $6.6 billion, held by both current and former employees. This transaction has propelled OpenAI’s overall valuation to an unprecedented $500 billion, marking the highest valuation ever attained by a privately held company.

Key investors participating in this sale included prominent firms such as SoftBank, Dragoneer Investment Group, Thrive Capital, MGX, and T. Rowe Price.

Unique Transaction Structure

Unlike typical funding rounds, the proceeds from this sale were distributed directly to shareholders and option holders, rather than being added to OpenAI’s corporate funds. Nevertheless, this event serves as a significant mechanism for employee retention.

OpenAI has been facing increased competition, particularly from Meta, whose AI division has been significantly strengthened. This competition has led to the recruitment of at least seven key engineers from OpenAI by Meta, often incentivized with substantial signing bonuses.

Recent Funding History

OpenAI’s previous funding round concluded in August, successfully raising $40 billion at a $300 billion valuation. Several investors from the recent sale also participated in this earlier round.

These included SoftBank, Thrive, T. Rowe Price, and Dragoneer, alongside private equity firms like Blackstone and TPG, and leading venture capital firms such as Founders Fund, Sequoia Capital, and Andreessen Horowitz.

Infrastructure Investment and Financial Capacity

This share sale underscores OpenAI’s capacity to secure funding as needed, a crucial asset considering its ambitious infrastructure development plans. The company has committed to a $300 billion investment in Oracle Cloud Services over the next five years.

This commitment significantly exceeds OpenAI’s current revenue and available reserves. However, the company’s strong fundraising performance suggests its financial strategies are viable.

Notably, Nvidia announced a $100 billion investment in OpenAI in September, as part of a strategic partnership focused on infrastructure.

Implications for Potential Conversion

The sale occurs shortly after a preliminary agreement between OpenAI and Microsoft, which many analysts interpreted as a step towards OpenAI’s transition into a for-profit organization. However, this conversion remains unconfirmed by legal proceedings.

The recent sales could introduce complexities should the conversion process encounter obstacles or fail to materialize as anticipated.

Continued Growth and Financial Performance

OpenAI continues its rapid pace of product development and launches, recently unveiling its Sora 2 video model and associated social media platform. The company’s revenue for the first half of 2025 reached $4.3 billion.

During the same period, OpenAI’s cash expenditure totaled $2.5 billion.