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OpenAI recently completed a secondary share sale that values the company at $500 billion, vaulting it past Elon Musk’s SpaceX to become the world’s most valuable private startup.

Current and former OpenAI employees sold about $6.6 billion in stock to investors including Thrive Capital, SoftBank, Dragoneer, Abu Dhabi’s MGX, and T. Rowe Price. Earlier this year, a SoftBank-led financing round pegged it at $300 billion.

The deal is remarkable on two fronts. First, OpenAI has yet to turn a profit, but it is now valued on par with the largest energy and industrial firms. The valuation has nothing to do with revenue multiples; it’s all about investor belief that AI will transform the world. Second, this is a secondary sale, not a new capital raise. The structure rewards employees and helps retain scarce AI talent in a market where Meta and others are offering compensation packages in the nine-figure range.

OpenAI is at an inflection point. The company is negotiating a corporate restructuring that would convert its hybrid nonprofit into a more traditional for-profit public benefit corporation, with the nonprofit still holding control. Elon Musk has sued to block the overhaul, claiming the company abandoned its founding mission when it accepted billions from Microsoft.

For now, the valuation underscores investor conviction that OpenAI will remain “the” brand name in AI. Based on what just happened with its Sora 2 launch, it may be a good bet.

Whether $500 billion is sustainable is another question. The company faces mounting costs to build and run AI infrastructure, intense competition for talent, and regulatory headwinds. But as of now, OpenAI is the most valuable startup in the world, and the signal to employees, rivals, and investors is unmistakable: the market believes.

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