OPENAI VALUATION HITS $500 BILLION, OVERTAKING SPACEX AS WORLD'S LARGEST STARTUP

OpenAl has become the world's most valuable startup, reaching a valuation of $500 billion following a secondary share sale.

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The milestone puts the artificial intelligence company ahead of Elon Musk's SpaceX, long considered the heavyweight in privately held tech, and underscores how central AI has become to global markets.

HOW THE DEAL CAME TOGETHER

The latest valuation was set through a secondary sale of OpenAl shares, in which early investors and employees sold stock to new backers.

Unlike a traditional funding round, a secondary sale does not raise fresh capital for the company, but it does reflect how much outside investors are willing to pay for equity.

This surge follows multiple waves of investment into OpenAl since its blockbuster launch of ChatGPT in November, 2022. Microsoft remains the company's most important backer, having committed more than $13 billion and integrating OpenAl's models into its core products like Word, Excel, and Azure cloud services.

The $500 billion figure represents an extraordinary leap for a company that was valued at $29 billion as recently as 2023.

WHY INVESTORS ARE BUYING IN

The demand for OpenAl shares reflects growing conviction that generative AI is not only transformative but also monetizable at scale.