OpenAI is reportedly engaged in discussions for a share sale that could see its valuation skyrocket to half a trillion dollars, surpassing the $350 billion valuation of Elon Musk’s SpaceX. The proposed transaction, which involves existing investors like Thrive Capital buying shares from current and former employees, would increase the company’s value by two-thirds from its current $300 billion. This monumental valuation would be a significant milestone for the AI developer, reflecting a voracious appetite from investors for leading AI technology companies. The deal serves multiple purposes, from fundraising to employee retention.
The timing of this potential deal is no coincidence, as the company faces a talent war with competitors. Mark Zuckerberg’s Meta has been on an aggressive hiring spree to build its own AI unit, offering “crazy” bonuses to lure top talent. To counter this, a significant share sale could provide a powerful incentive for OpenAI’s staff to stay, offering them a chance to monetize their holdings at a premium valuation. This strategy is essential for a company that relies heavily on its human capital to develop cutting-edge models. The competitive landscape also includes Anthropic, a rival founded by former OpenAI staff, which is also seeking a new valuation of $170 billion.
Financially, AI development is an incredibly capital-intensive endeavor. The continuous need for fundraising is driven by the vast costs of training advanced models, which require expensive computer chips and extensive data center resources. This reality is underscored by recent announcements from OpenAI, including CEO Sam Altman’s hint at the upcoming GPT-5 model and the launch of two new open models. The open models, a competitive response to similar offerings from Meta and DeepSeek, are designed to make AI more accessible, even as the company’s core business remains centered on its closed, proprietary models.
Beyond its core software business, OpenAI is making a bold foray into hardware. The recent acquisition of io, a startup co-founded by legendary designer Sir Jony Ive, for $6.4 billion, signals a major strategic shift. CEO Sam Altman has shared an ambitious vision of creating 100 million AI “companions” for everyday use. Though mass production of this new device is not expected until 2027, the prototype has been hailed as “the coolest piece of technology that the world will have ever seen.” This expansion into hardware, alongside its ongoing negotiations to transition to a fully for-profit structure, illustrates a company in a state of rapid, multifaceted evolution.