OpenAI Considers $500 Billion Valuation in Employee Share Sale Talks
OpenAI is reportedly in early discussions about a potential stock sale that could value the artificial intelligence firm at around $500 billion. The deal would allow employees to sell shares and benefit from the company’s rapid growth, according to a source familiar with the talks.
Employee Stock Sale Could Signal Massive Valuation Jump
If completed, the proposed sale would mark a significant leap from OpenAI’s current $300 billion valuation. The move highlights the company’s soaring user numbers and growing revenue. It also reflects the fierce competition among AI companies to attract top talent with lucrative incentives.
This transaction, which would occur before any public listing, would allow current and former staff to sell billions of dollars’ worth of shares. The source, who declined to be named due to the private nature of the talks, said the deal would provide a valuable opportunity for employees to cash out.
OpenAI ChatGPT Drives Revenue Growth and User Surge
OpenAI’s success has largely been driven by its popular ChatGPT platform. The company has seen its revenue double in just the first seven months of the year, reaching an annualised rate of $12 billion. It is expected to hit $20 billion by the end of the year.
Weekly active users for ChatGPT products have climbed to about 700 million, up from 400 million in February. Backed by Microsoft, OpenAI continues to gain momentum as it builds on the strong demand for generative AI tools.
AI Talent Battle Heats Up as Share Sale Nears
Earlier this year, OpenAI launched a major funding round aiming to raise $40 billion. The round is led by Japan’s SoftBank Group, which must provide $22.5 billion before year-end. The remaining portion has already been subscribed at a $300 billion valuation.
The employee share sale talks follow this funding initiative. Existing investors, including Thrive Capital, are said to be considering participation. However, Thrive declined to comment.
OpenAI is also restructuring its corporate framework, aiming to move beyond its capped-profit model. This change could eventually lead to an initial public offering, although CFO Sarah Friar noted in May that an IPO will only occur when both the company and markets are ready.
Meanwhile, other tech companies are also pushing aggressively for top AI talent. Meta is reportedly investing billions in Scale AI, seeking to recruit its CEO, Alexandr Wang, to head its new AI division.
Other firms, such as ByteDance, Databricks and Ramp, have also used private share sales to reassess company valuations and reward long-serving employees.
with inputs from Reuters