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OpenAI is planning to offer $10.4 billion in secondary share sales as it boosts the size of its offering from an earlier $6 billion, suggests a report from CNBC. The firm is the most valuable AI company in the world and plans to sell more equity at $500 billion and simultaneously resolve its ownership and profitability structures. The secondary sales also come after CEO Sam Altman warned earlier that AI could be in a bubble following reports of businesses finding it difficult to generate profit with their AI systems.
OpenAI Boosts Secondary Offering Size As It Offers Some Employees The Opportunity To Cash Out
According to CNBC, OpenAI has increased the size of its secondary offering to $10 billion by increasing it by $4 billion. Through the deal, not only will investment firms such as Softbank, T. Rowe Price and Abu Dhabi's MGX be able to buy the shares, but its employees who have held the shares for more than two years will be able to sell them.
The news comes after OpenAI CEO Sam Altman raised eyebrows after commenting that AI could be a bubble. Artificial intelligence stocks, particularly the shares of GPU designer NVIDIA Corporation, have shaken markets this year due to their meteoric rise as investors bet on billions of dollars in AI spending by businesses this decade and in the future.
Commenting that in bubbles "smart people get overexcited about a kernel of truth," Altman added that "Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes," according to a conversation quoted by The Verge.
His comments came after OpenAI's GPT-5 models failed to impress users and created uncertainty about the firm's ability to scale up its products. AI firms have claimed to be working towards artificial general intelligence, but more than two years have passed since ChatGPT was released to the public, and these promises have not borne fruit.
While OpenAI is believed to sell the shares at a $500 billion valuation, its latest funding round had valued the firm at $300 billion. As a result, data from Crunchbase lists it in second place in the list of most valuable unicorn startups, with Elon Musk's SpaceX being the most valuable company through a $400 billion valuation.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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