OpenAI now worth $500 billion, possibly making it the world’s most valuable startup

OpenAI could now be the world's most valuable startup, ahead of Elon Musk's SpaceX and TikTok's parent company ByteDance, after a secondary stock sale designed to retain employees at the ChatGPT maker. Current and former OpenAI employees sold $6.6 billion in shares to a group of investors, pushing the privately held artificial intelligence company's valuation to $500 billion, according to a source with knowledge of the deal who was not authorized to discuss it publicly. The investors buying the shares included Thrive Capital, Dragoneer Investment Group and T. Rowe Price, along with Japanese tech giant SoftBank and the United Arab Emirates's MGX, the source said. The valuation reflects high expectations for the future of AI technology and continues OpenAI's remarkable trajectory from its start as a nonprofit research lab in 2015. But with the San Francisco-based company not yet turning a profit, it could also amplify concerns about an AI bubble if the generative AI products made by OpenAI and its competitors don't meet the expectations of investors pouring billions of dollars into research and development. OpenAI CEO Sam Altman has sought to dismiss those concerns when he toured a massive data center complex being built to run the company's AI systems in Abilene, Texas. "Between the ten years we've already been operating and the many decades ahead of us, there will be booms and busts," Altman said after being asked about a bubble. "People will overinvest and lose money, and underinvest and lose a lot of revenue." He added that "we'll make some dumb capital allocations" and there will be short-term ups and downs, but that "over the arc that we have to plan over, we are confident that this technology will drive a new wave of unprecedented economic growth," along with scientific breakthroughs, improvements to quality of life and "new ways to express creativity." A few weeks ago, the company launched two different business ventures, one a partnership with Etsy and Shopify for online shopping through ChatGPT and another a social media app, Sora, for generating and sharing AI videos. This article was provided by The Associated Press.