The rivalry between Elon Musk and Sam Altman has escalated into a high-stakes valuation battle, with their respective companies vying for the title of the world’s most valuable private company. The two tech titans, who cofounded OpenAI together in 2015, have seen their partnership deteriorate dramatically since Musk’s departure in 2018.
In October, OpenAI conducted a secondary share sale that valued the AI company at an impressive $500 billion, surpassing Musk’s SpaceX by $100 billion and claiming the top spot among private companies. This milestone represented a significant achievement for Altman’s AI venture, which has been at the forefront of developing advanced artificial intelligence systems.
However, Musk is not content to let his former partner hold this distinction for long. According to internal communications obtained by multiple media outlets, SpaceX is planning its own secondary share sale that would value the aerospace company at a staggering $800 billion—a $300 billion premium over OpenAI’s current valuation. If executed soon, this would mean Altman’s reign at the top would last only a couple of months.
Musk also confirmed on X (formerly Twitter) this week that SpaceX is exploring a blockbuster initial public offering (IPO), which could further cement its valuation leadership. In response, OpenAI has restructured its business operations this year, positioning itself to pursue its own potential IPO in the future—perhaps the only viable path to reclaim the top position.
The personal animosity between the two billionaires is well-documented. Since leaving OpenAI, Musk founded rival AI startup xAI, and either he or his company has filed multiple lawsuits against OpenAI. The two have also engaged in frequent public disputes and traded barbs on social media.
Beyond the personal drama, this valuation battle represents a significant shift in investor sentiment toward frontier technologies. Both SpaceX, which aims to colonize Mars and make humanity multi-planetary, and OpenAI, which seeks to develop artificial general intelligence (AGI) that can reason like humans, were once considered speculative science projects. Now, they’re commanding valuations that rival or exceed many established Fortune 500 companies. This trend extends beyond these two companies, with AI, robotics, and defense tech startups collectively notching multibillion-dollar valuations over the past year, despite concerns about a potential tech bubble.
Key Quotes
OpenAI held a secondary share sale in October that valued it at $500 billion, taking the lead from Musk’s SpaceX by a cool $100 billion.
This quote highlights the significant milestone OpenAI achieved in becoming the world’s most valuable private company, demonstrating investor confidence in AI technology and OpenAI’s market position in the competitive AI landscape.
investors are pouring unprecedented money into technologies once viewed as speculative science projects.
This observation from the article captures the fundamental shift in how frontier technologies like AI and space exploration are perceived, moving from experimental ventures to mainstream investment opportunities commanding hundreds of billions in valuations.
Our Take
This valuation arms race between Musk and Altman reveals more than just billionaire ego—it exposes the extraordinary confidence investors have in AI’s transformative potential. The $500-800 billion valuations being discussed would have seemed absurd just five years ago for companies that don’t generate profits comparable to traditional tech giants. Yet here we are, with OpenAI potentially worth more than established corporations with decades of revenue history.
What’s particularly noteworthy is how this competition may actually accelerate AI development, as both leaders push their companies to justify these astronomical valuations with tangible breakthroughs. However, the personal animosity and legal battles between Musk and Altman could also fragment the AI research community at a critical moment when collaboration on safety and ethics is essential. The rush to IPOs also raises questions about whether profit motives will overshadow the original mission of developing beneficial AI for humanity. This story is less about two billionaires and more about how the AI industry is entering a new, more commercialized phase with profound implications.
Why This Matters
This valuation battle between Musk and Altman signifies a watershed moment for the AI industry and frontier technologies more broadly. The fact that OpenAI can command a $500 billion valuation—and that investors are willing to value SpaceX at $800 billion—demonstrates that AI is no longer viewed as speculative but as a fundamental technology reshaping the global economy.
The competition between these two companies reflects the massive capital influx into AI development, which is accelerating innovation but also raising questions about sustainability and market rationality. For businesses, this signals that AI capabilities are becoming essential competitive advantages worth premium investments. The restructuring of OpenAI to enable a future IPO also suggests that AI companies are maturing from research labs into traditional corporate structures, which could impact their mission-driven approaches.
For workers and society, these valuations underscore AI’s growing influence across industries, from automation to decision-making systems. The rivalry between xAI and OpenAI may also drive faster AI development, with implications for regulation, safety, and the race toward artificial general intelligence. This story exemplifies how personal dynamics among tech leaders can shape the trajectory of transformative technologies that will affect billions of people.
Related Stories
- Elon Musk’s $97B OpenAI Bid: Strategic Move or Elaborate Troll?
- Elon Musk’s XAI Secures $6 Billion in Funding for Artificial Intelligence Research
- Sam Altman and Jony Ive Partner on AI Device, Target $1B Funding
- OpenAI Lost Nearly Half of Its AI Safety Team, Ex-Researcher Says
- OpenAI’s Competition Sparks Investor Anxiety Over Talent Retention at Microsoft, Meta, and Google
Source: https://www.businessinsider.com/spacex-valuation-elon-musk-sam-altman-openai-rivalry-2025-12