OpenAI overtakes SpaceX to become the world's most valuable startup with a valuation of $500 billion

OpenAI has completed a deal to sell shares to employees at a valuation of $500 billion. This allowed the company to overtake Elon Musk's SpaceX and top the ranking of the world's most valuable startups, Bloomberg reports.

Current and former OpenAI employees sold $6.6 billion in stock to investors including SoftBank, MGX, and Thrive Capital. This raised the company’s valuation well above its previous $300 billion valuation. In total, fewer shares were sold than the $10 billion OpenAI employees were allowed to buy, showing that current and former employees believe in the company’s long-term future.

The new deal helped ChatGPT developer surpass Elon Musk’s SpaceX, which is valued at $400 billion, to become the world’s most valuable startup. The milestone comes as OpenAI has been in talks with Microsoft to become a more traditional commercial company, though the company reportedly backed out of that idea earlier this year.

OpenAI was founded in 2015 as a non-profit organization with the original goal of creating artificial intelligence that would benefit humanity. The startup's co-founders, Sam Altman and Elon Musk, have spoken out about the existential threat AI could pose to humanity, but they have since fallen out, prompting several lawsuits from the world's richest man. Musk, in particular, has tried to stop OpenAI from going commercial, accusing the startup of abandoning its original purpose.

Recall that at the end of September, OpenAI introduced a new video generation model, Sora 2, with realistic physics and synchronized sound.