Quick overview

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ChatGPT surpassed Elon Musk’s SpaceX to become the largest startup in the world after reaching an agreement to help staff sell company shares at a $500 billion valuation. About $6.66 billion worth of stock was sold by current and former OpenAI employees to investors such as SoftBank Group Corp., Thrive Capital, Dragoneer Investment Group, MGX, and T in Abu Dhabi.

Rowe Price stated that this significantly boosted the US company’s valuation above its $300 billion mark from a SoftBank-led funding round earlier this year.

OpenAI’s valuation now exceeds SpaceX’s $400 billion after the deal. For Altman’s company, which is negotiating with Microsoft, this milestone comes at a crucial moment as it aims to transform into a more traditional for-profit business.

OpenAI was founded in 2015 as a nonprofit dedicated to advancing digital intelligence “in the way that is most likely to benefit humanity as a whole.”

The current nonprofit organization will retain authority over a new public benefit corporation as part of planned changes. OpenAI’s co-founders, Musk and Altman, have both spoken about the existential threat that AI poses to humanity. However, they have since parted ways.

Musk has filed a lawsuit to try to stop the overhaul, claiming that OpenAI broke promises made to him when he helped establish the nonprofit. He argues that when it started receiving billions of dollars in funding from Microsoft in 2019, the year after he left OpenAI’s board, it betrayed its original purpose..