OpenAI is eyeing a $500 billion valuation after early stage talks with investors. CNBC’s MacKenzie Sigalos joins 'Money Movers' to discuss the potential blockbuster deal.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

OpenAI is reportedly in early talks with investors regarding a secondary stock sale that could value the company at $500 billion. This would make OpenAI the most valuable private company globally, overtaking SpaceX, and place its valuation above major corporations like Netflix and ExxonMobil. Thrive Capital is expected to potentially lead the secondary sale, which would allow current and former employees to sell vested shares.

The company is projecting annual recurring revenue above $20 billion and has seen significant user growth, with ChatGPT reaching 700 million weekly active users. Despite not being cashflow positive and burning an estimated $8 billion annually, investor interest remains strong, reflecting the rapid pace of growth and competition in the AI industry. OpenAI's last major employee stock sale valued the company at $157 billion, and the current talks come as rival Anthropic also seeks a higher valuation.

OpenAI's blockbuster valuation deal

Open AI now eyeing a staggering half a trillion dollar valuation after early stage talks with investors about an employee's stock sale. Mackenzie Sagalos has that news for today's Tech Check. Hey, Mack. Hey, Leslie. So this deal, which would allow both current and former employees to sell vested shares, would put Open AI ahead of SpaceX as the most valuable private company in the world and make it worth more than Netflix or ExxonMobil, marking one of the fastest climbs to that level in tech history. Now, sources tell me that these talks are still early, but at this point, it looks like Thrive Capital, which is already on the startup's cap table, would potentially lead the secondary sale. Now, this comes as Open AI projects annual recurring revenue above $20 billion this year. ChatGBT hits 700 million weekly active users, and the company begins opening its models to developers for the first time since 2019. Rival Anthropic is also in talks to raise funding at a $170 billion valuation, underscoring just how quickly these valuations are moving across the AI industry. It was only seven months ago that Open AI last held a major employee stock sale that valued the company at $157 billion. Since then, they've signed a deal with SoftBank, which nearly doubled its valuation. And without a near-term IPO in sight, another secondary sale could be a good way to reward and retain talent in the midst of these AI talent wars. It's a bet that it's willing to make, even as the company bleeds cash, burning an estimated $8 billion a year as it spends big on ships and new data centers. Now, the startup isn't projected to be cashflow positive until 2029, according to reports, a reminder that investors are still willing to price the company like a tech giant long before it turns a profit.

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OpenAI's blockbuster valuation deal

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