OpenAI has become the world’s most valuable startup after a secondary share sale valued the company at USD 500 bn, overtaking Elon Musk’s SpaceX at USD 400 bn. The company was last valued at USD 300 bn in March, when SoftBank led a USD 40 bn round that included Abu Dhabi’s MGX.

The details: The latest transaction allowed staff and former employees to sell USD 6.6 bn worth of shares to investors including Thrive Capital, SoftBank, Dragoneer, MGX, and T. Rowe Price, the Financial Times quotes a source familiar with the matter as saying. The sale was heavily oversubscribed, with demand exceeding USD 10 bn. OpenAI had cleared up to USD 10 bn in stock for resale, but many employees opted to hold — a move insiders said reflected confidence in the company’s outlook.

The share sale highlights frenzied demand for AI, with investors speculating whoever comes out as the leader for the sector could eventually be worth USD tns. That optimism has been bolstered by Nvidia’s pledge last month to invest up to USD 100 bn in OpenAI to expand computing capacity.

Markets responded with a global rally: Chipmakers and tech indices added more than USD 200 bn in value in a single session, Bloomberg reports. South Korea’s SK Hynix jumped 10%, Samsung rose 3.5%, and the Kospi hit a record high. Taiwan’s TSMC and Hon Hai also climbed, as OpenAI entered into an agreement with South Korea’s SK Group and Samsung for the supply of chips for its Stargate initiative with Oracle and SoftBank.

Valuations are now stretched: The Philadelphia Semiconductor Index now trades at 27x forward earnings, close to last year’s peak, while Bloomberg’s Asia chip gauge stands at 19x. The Hang Seng Tech Index is up 50% YTD, also boosted by state support and corporate AI investment in China.

Analysts say the rally reflects fear of missing out. “Tech momentum shows no sign of fading [...] with headwinds brushed aside and every AI headline sparking bursts of euphoria,” Hebe Chen at Vantage Markets said. “Bubble talk lingers, but it’s FOMO that’s clearly running the show.”

Still, some warn valuations are running ahead of fundamentals, and any earnings stumble among mega-cap techs could trigger another sharp selloff, echoing April’s meltdown, JPMorgan Asset Management cautioned. “[Upcoming] fourth quarter earnings may force the reality check,” Chen added.

Not a problem for OpenAI? The company expects annual recurring revenue to hit USD 20 bn by year-end, up from USD 12 bn currently, FT reports, citing a person with knowledge of its finances.

MARKETS THIS MORNING-

Asian markets are mostly in the green, tracking a Wall Street rally led by AI stocks. The only outlier was Hong Kong’s Hang Seng, which fell nearly 0.5%. Over on Wall Street, futures point to another strong open as US investors shrug off the government shutdown.

ADX

10,065

+0.4% (YTD: +6.9%)

DFM

5,916

+0.5% (YTD: +14.7%)

Nasdaq Dubai UAE20

4,788

+0.9% (YTD: +15.8%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

4.0% o/n

3.8% 1 yr

TASI

11,496

-0.3% (YTD: -4.5%)

EGX30

36,901

+0.4% (YTD: +24.1%)

S&P 500

6,715

+0.1% (YTD: +14.2%)

FTSE 100

9,428

-0.2% (YTD: +15.4%)

Euro Stoxx 50

5,646

+1.2% (YTD: +15.3%)

Brent crude

USD 64.27

+0.3%

Natural gas (Nymex)

USD 3.41

-1%

Gold

USD 3,885.1

+0.4%

BTC

USD 120,606

+1.9% (YTD: +27.7%)

Chimera JP Morgan UAE Bond UCITS ETF

AED 3.71

-1.1% (YTD: +6.5%)

S&P MENA Bond & Sukuk

150.76

-0.0% (YTD: +7.7%)

VIX (Volatility Index)

16.63

+2.1% (YTD: -4.2%)

THE CLOSING BELL-

The ADX rose 0.4% yesterday on turnover of AED 1.5 bn. The index is up 6.9% YTD.

In the green: Hily Holding (+14.5%), The National Bank of Ras Al Khaimah (+4.9%) and Bank of Sharjah (+4.3%).

In the red: Al Khaleej Investment (-7.7%), Aram Group (-7.0%) and National Bank of Umm Al Qaiwain (-1.9%).

Over on the DFM, the index rose 0.5% on turnover of AED 2.3 bn. Meanwhile, Nasdaq Dubai was up 0.9%

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