OpenAI has just completed a roughly $6.6 billion secondary share sale—where existing and former employees sold shares to institutional investors—pushing its valuation to about $500 billion, making it the highest-valued private company of all time. According to reporting from TechCrunch, the buyers included SoftBank, Dragoneer, Thrive Capital, MGX, and T. Rowe Price, and this move comes after OpenAI’s prior $40 billion funding round earlier this year that valued it at $300 billion. Reuters adds that during the first half of 2025, OpenAI generated approximately $4.3 billion in revenue but also burned about $2.5 billion—underscoring that its valuation leap is still grounded more in forward expectations than in present profitability. Meanwhile, investors and analysts are sounding caution: the AI startup funding boom has raised fears of a speculative bubble, with valuations increasingly decoupled from fundamentals.
Sources: Reuters, TechCrunch
Key Takeaways
– The $6.6 billion secondary stock sale enabled employees to cash out while pegging OpenAI’s valuation at an unprecedented $500 billion (versus its prior $300 billion valuation).
– OpenAI’s revenues in H1 2025 (~$4.3 billion) contrast with its high cash burn (~$2.5 billion), highlighting that its valuation is largely driven by investor confidence in future growth.
– The broader surge in AI startup investments is drawing caution: many experts warn that valuations are racing ahead of actual performance, suggesting bubble risk in the sector.
In-Depth
OpenAI’s recent financial maneuver has captured the tech world’s attention: by facilitating a $6.6 billion secondary share sale, it has vaulted its valuation to $500 billion, thereby becoming the most valuable private company ever (and outstripping SpaceX’s reported $400 billion valuation). The deal allowed existing and former employees—many of whom hold stock or options—to monetize positions, rather than injecting new capital into the company itself. That makes this move more about liquidity and morale than about direct expansion funding.
This mark-up arrives just months after OpenAI’s massive $40 billion primary funding round, which valued it at $300 billion, led by SoftBank and backed by major investors. The new round underscores both the appetite for AI exposure and the aggressive competition to attract and retain top engineering talent. OpenAI remains under pressure from rivals (e.g. Meta reportedly poached several of its top engineers) and has ambitious infrastructure plans, including large-scale compute deployments likely tied with its partners.
Yet the numbers behind the sheen show tension. In the first half of 2025, OpenAI earned about $4.3 billion, but it also burned $2.5 billion, largely due to research, development, and infrastructure costs. The firm holds cash and securities on hand—reportedly in the billions—but it is not yet turning a sustainable profit. In effect, investors are placing big bets that future returns will validate current valuations.
That bet is not without risk. In the broader startup ecosystem, AI-focused companies have drawn a disproportionate share of funding—and that has prompted more than a few warnings. At the Milken Institute Asia Summit, investors cautioned that valuation metrics may have detached from real performance. According to data from PitchBook, AI-branded firms absorbed a large share of capital in early 2025, raising concerns that hype is eclipsing fundamentals.
The tension is elementary: the math behind early-stage tech valuations often depends more on expectation than earnings. When market momentum is strong, investors lean into narratives (e.g. “AI is the future”) and are willing to accept greater risk. But when the narrative loses momentum or expectations shift, valuations that overshoot fundamentals can be punished sharply.
For now, OpenAI’s $500 billion valuation is a statement—one of confidence, prestige, and ambition. But it also puts the company under enormous pressure to deliver. Every product launch, every algorithmic breakthrough, every infrastructure expansion must now be viewed through the lens of “justifying a valuation this large.” The margin for error tightens. In the near term, winning investor confidence remains as much about optics, growth trajectory, and risk control as it does about technical breakthroughs. Whether OpenAI can navigate that balance wisely is the question that will define whether this valuation becomes legacy or liability.