From non-profit to $500 billion: OpenAI's valuation rise
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Founded in December 2015 as a nonprofit, which Elon Musk will keep reminding chief executive Sam Altman, OpenAI has evolved over the past decade to become one of the world's most valuable private technology companies It started with grants, donations, and modest investments from technology leaders. But recent reports suggest that OpenAI is approaching a $500 billion market capitalisation as current and former employees may sell some shares. The company's valuation remained comparatively low during its early years while it focussed on developing its artificial intelligence (AI) technology.OpenAI became a unicorn and reached $1 billion in valuation in July 2019 as investor interest grew around AI research and commercialisation. This is when Microsoft was added to the company's cap table.By April 2021, as commercialisation within the tech and enterprise space and the relevance of large language models and generative AI increased, OpenAI's value was pushed to $14 billion.OpenAI released ChatGPT in November 2022, marking a major juncture for the company. The conversational AI chatbot took the world by storm, with hundreds of thousands using it regularly, and Big Tech peers coming out with rivals in the subsequent year. This pushed OpenAI's valuation to $29 billion by January 2023.In 2023, OpenAI expanded its offerings with new models and developer tools, such as plug-ins and enterprise APIs, which further accelerated its market presence.By February 2024, sustained growth and new product launches had taken OpenAI's valuation to $86 billion. However, a major fillip came in October 2024, when the company closed a $6.6 billion funding round led by major investors including Microsoft, Nvidia, and SoftBank. This round raised OpenAI's valuation to $157 billion, making it one of the highest-valued private companies globally.OpenAI closed a $40 billion funding round in March led by SoftBank Group, with other investors including Magnetar Capital, Coatue Management, Founders Fund, and Altimeter Capital Management participating. This nearly doubled the market cap to $300 billion.OpenAI's product evolution has continued, with launches like GPT-4 and, most recently, GPT-5 that have increased capabilities and increased adoption across sectors. Bloomberg reported on August 16 that current and former OpenAI employees are in talks to sell about $6 billion worth of stock to investors, including Thrive Capital, SoftBank Group Corp., and Dragoneer Investment Group, in a deal that would value the ChatGPT maker at $500 billion.
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