OpenAI overtakes SpaceX as world's most valuable start-up at $500B
What's the story
OpenAI has surpassed Elon Musk's SpaceX to become the world's most valuable start-up, following a secondary share sale at a whopping $500 billion valuation, according to Bloomberg. The deal, which involved current and former employees selling around $6.6 billion worth of shares, was led by Thrive Capital, SoftBank Group Corp., Dragoneer Investment Group, Abu Dhabi's MGX, and T. Rowe Price. OpenAI was previously valued at $300 billion in a $40 billion funding round led by SoftBank Group Corp.
Previous worth
Strategy to reward and retain employees
The latest secondary sale comes as part of a strategy to reward and retain employees while also attracting external investors. The total eligible units sold in the secondary were below the $10 billion-plus stock the company made available. This indicates that current and former employees are showing confidence in the company's long-term prospects.
Talent retention
Competition for AI talent intensifies
The secondary sale comes as OpenAI faces stiff competition for AI talent from Meta Platforms Inc., which has been aggressively hiring researchers from top labs for its new "super-intelligence" team. The move is seen as a way to incentivize staff to stay at the company and turn down lucrative compensation offers from rivals.