OpenAI Becomes World’s Most Valuable Private Company With $500 Billion Valuation

OpenAI has overtaken SpaceX to claim the title of the world’s most valuable private company. According to Bloomberg, the artificial intelligence powerhouse has reached a valuation of $500 billion, surpassing SpaceX’s $400 billion and TikTok parent company ByteDance’s $220 billion.

The milestone follows a secondary share sale authorized by OpenAI, which allowed both current and former employees to sell their holdings. Although the company had approved the sale of $10.3 billion worth of shares, only $6.6 billion was purchased by investors, including Softbank, Abu Dhabi’s MGX fund, Thrive Capital, and T. Rowe Price.

Transition to Public Benefit Corporation Gains Momentum

In September, OpenAI revealed it was preparing to shift to a Public Benefit Corporation (PBC) structure. This move would place control in the hands of its nonprofit division, which has already secured an equity stake exceeding $100 billion, giving it a significant shareholding in the for-profit entity.

The company believes the transition could attract more investors by removing caps on potential returns. This would provide the financial backing OpenAI requires for its ambitious expansion plans.

Elon Musk Challenges OpenAI’s Direction in Court

Not everyone is in support of OpenAI’s new structure. Elon Musk, one of the company’s original founders, has been vocal in his opposition. Musk, who helped fund OpenAI at its inception, is currently attempting to block the transition in court.

He argues that the company and CEO Sam Altman are straying from the organization’s founding mission of developing AI “for the benefit of humanity.” Musk claims the structural shift undermines the company’s original purpose.

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Meanwhile, Altman has said the company plans to invest trillions of dollars into building data centers needed to power advanced artificial intelligence services, which reflects the scale of its future ambitions.

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