The reported valuation makes it the world’s most valuable private company.
OpenAI has reached a $500bn valuation after current and former employees at the ChatGPT maker sold approximately $6.6bn worth of shares, multiple news publications report.
This is up from a $300bn valuation the company announced just this April and makes OpenAI the world’s most valuable private company, bigger than SpaceX and TikTok’s parent ByteDance.
According to sources, OpenAI had authorised more than $10bn in shares for secondary sale – up from its previous target of $6bn. The offer was made to former and present employees this September with participation open to those who held their shares for more than two years.
However, only around two-thirds of the approved value exchanged ownership. Those letting go of their shares sold them to a consortium of investors including SoftBank, Thrive Capital, Abu Dhabi’s MGX, Dragoneer Investment Group and T Rowe Price.
A lower share sale means that, internally, employees are confident of OpenAI’s long-term prospects.
While the gargantuan valuation means that large, key investors see OpenAI as a central pillar in the ongoing AI overhaul of industries and workplaces.
Reports of a possible buy-back of shares were swirling since August. It comes after the start-up signed a massive $300bn deal to use Oracle’s compute power, reportedly will pay $10bn to Broadcom for custom-made AI chips, while signing contracts in the UK to develop the country’s AI infrastructure through its Stargate venture.
The company is also ironing out its restructuring plans with Microsoft, which is expected to take up to a 30pc stake in the company.
Making AI palatable
OpenAI just released a vertically scrollable social app filled with AI-generated short-form videos that users have created using Sora 2, its latest video-generating model.
The app, called Sora, is only available in the US and Canada – as of now – and early reviews already highlight that AI output is rife with copyrighted materials.
The app also gives users the ability to generate the likeness of any person and share the short-form videos with their followers and friends. Meaning, bad actors could generate clips of fake events, potentially making the very real problem of disinformation, worse.
Despite the possible negatives, the app makes the consumption of AI-generated content more palatable to users.
As The New York Times puts it, OpenAI has created a way to bring “AI to the masses that people can share, enticing one another to create posts and regularly use their apps and services”. Other companies such as Meta, with its AI app called Vibes, are trying to achieve the same.
This is where, perhaps, OpenAI has succeeded. Since the launch of ChatGPT back in 2022, to Sora today, the company makes interacting with and consuming AI easier and entertaining, successfully making the permeation of AI into our lives seem almost normal.
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