OpenAI wraps $6.6 billion share sale at $500 billion valuation

OpenAI has successfully concluded a landmark secondary share sale worth $6.6 billion, enabling both current and former employees to sell their stock at an impressive valuation of $500 billion. This significant milestone was first reported by Bloomberg, with sources close to the transaction confirming the deal's closure. In August, CNBC highlighted OpenAI's plans for this secondary sale at the $500 billion valuation, attracting a range of investors, including Thrive Capital, SoftBank, Dragoneer Investment Group, Abu Dhabi’s MGX, and T. Rowe Price. Although OpenAI had authorized the sale of up to $10.3 billion in shares—an increase from an initial target of $6 billion—approximately two-thirds of this amount was actually transacted. Insiders have interpreted the lower participation rate as a positive signal regarding the company's long-term potential, indicating that investor interest remains robust despite the high valuation, which has surged from $300 billion earlier this year. The opportunity to participate in the share sale was extended to eligible current and former employees in early September, specifically for those who had held their shares for over two years. This marks OpenAI's second significant tender offer in less than a year, following a $1.5 billion agreement with SoftBank last November. With this latest transaction, OpenAI has solidified its position as the most valuable privately held company globally, surpassing SpaceX's valuation of $456 billion. The share sale also occurs amidst fierce competition for AI talent, with companies like Meta reportedly offering substantial compensation packages to attract leading researchers. OpenAI is part of a growing trend among high-profile startups, including SpaceX, Stripe, and Databricks, that are utilizing secondary sales to allow employees to monetize their shares while remaining private. This strategy is perceived as a means to retain talent and reward loyal employees without moving towards an IPO.