OpenAI’s $6.6 Billion Share Sale Boosts Valuation to $500 B, Marking Largest Private‑Company Valuation
Key Points
- OpenAI sold $6.6 billion in employee-held shares, raising its valuation to $500 billion.
- Investors included SoftBank, Dragoneer, Thrive Capital, MGX and T. Rowe Price.
- The sale was a retention tool amid talent poaching by Meta’s AI lab.
- Earlier, OpenAI raised $40 billion at a $300 billion valuation with a broad investor base.
- Committed to spend $300 billion on Oracle Cloud Services over five years.
- Nvidia announced a $100 billion strategic infrastructure partnership.
- A non‑binding deal with Microsoft may pave the way for a for‑profit conversion.
- OpenAI launched the Sora 2 video model and related social‑media feed.
- First‑half 2025 revenue was $4.3 billion with a $2.5 billion cash burn.
OpenAI sold $6.6 billion worth of shares held by current and former employees, a transaction that lifted its valuation to $500 billion, the highest ever for a privately held firm. The sale, which involved investors such as SoftBank, Dragoneer Investment Group, Thrive Capital, MGX and T. Rowe Price, was not a traditional funding round because the proceeds went directly to shareholders. The move comes amid heightened competition with Meta’s AI lab, recent large‑scale funding rounds, and strategic partnerships with Oracle, Nvidia and Microsoft, while the company continues to roll out new products like the Sora 2 video model.
Share Sale and Record Valuation
OpenAI completed a share sale that transferred $6.6 billion in equity held by current and former employees to a group of high‑profile investors. The transaction, reported by Bloomberg, pushed the company’s total valuation to $500 billion, establishing a new benchmark for privately held companies. Purchasers included SoftBank, Dragoneer Investment Group, Thrive Capital, MGX and T. Rowe Price. Unlike a conventional financing round, the cash from the sale went directly to the individual shareholders rather than into OpenAI’s corporate treasury, serving as a retention tool for the talent pool.
Competitive Landscape and Talent Retention
OpenAI’s decision to liquidate shares for its employees arrives as the firm confronts intensified competition from Meta’s revitalized AI laboratory. Meta has attracted at least seven top OpenAI engineers, offering multimillion‑dollar signing bonuses to lure them away. By providing a lucrative exit option for existing shareholders, OpenAI aims to preserve its core talent amid this poaching pressure.
Recent Funding History
Prior to the share sale, OpenAI secured a $40 billion funding round in August at a $300 billion valuation. That round featured participation from SoftBank, Thrive Capital, T. Rowe Price, Dragoneer Investment Group, as well as private‑equity firms Blackstone and TPG and venture‑capital stalwarts Founders Fund, Sequoia Capital and Andreessen Horowitz. The influx of capital underscores investor confidence in OpenAI’s growth trajectory despite the sizable cash burn.
Strategic Partnerships and Infrastructure Commitments
OpenAI has committed to spending $300 billion on Oracle Cloud Services over the next five years, a commitment that exceeds its current revenue and reserve levels. In parallel, Nvidia announced a $100 billion investment plan to support OpenAI’s infrastructure needs, framing the partnership as a strategic alliance. Additionally, a non‑binding agreement with Microsoft, recently publicized, is viewed as a potential pathway toward converting OpenAI into a for‑profit entity, though the conversion has not yet been confirmed in court. The recent share sale could introduce complexities if the conversion does not materialize.
Product Innovation and Financial Performance
Continuing its rapid product rollout, OpenAI released the Sora 2 video model and an accompanying social‑media feed earlier this week. Financially, the company reported $4.3 billion in revenue for the first half of 2025 while incurring a cash burn of $2.5 billion, reflecting the high‑cost nature of its ambitious infrastructure and development agenda.