 "Employees who were issued restricted stock units at least two years ago are eligible to participate, with the deadline to decide set for December 24. Current employees are given priority over former staff, ensuring they can cash out up to $10 million each. Image Credit: Reuters")
Around 400 current and former OpenAI employees are poised to become millionaires thanks to a private stock sale arranged by the San Francisco-based AI company. The deal, involving Japan’s SoftBank Group, offers eligible shareholders a chance to sell their equity at $210 per share, marking a significant payday for many.
With OpenAI’s valuation skyrocketing to $157 billion over the past year, this tender offer has become a lucrative opportunity for insiders to cash in on the company’s explosive growth.
SoftBank’s big move in AI
SoftBank has decided to continue its aggressive investment in artificial intelligence and is set to purchase up to $1.6 billion worth of OpenAI stock through this offer. Employees who were issued restricted stock units at least two years ago are eligible to participate, with the deadline to decide set for December 24.
Current employees are given priority over former staff, ensuring they can cash out up to $10 million each. Former employees, however, are guaranteed at least $2 million worth of sales, though they may not reach the $10 million cap if the deal becomes oversubscribed.
For SoftBank, this deal strengthens its position in the AI space, following a $500 million investment in OpenAI’s recent $6.6 billion fundraising round. The offer aligns with the valuation achieved during that round, reflecting the growing market appetite for AI-driven innovation. SoftBank’s ambitious AI plans were further highlighted by its announcement of a $100 billion investment in AI infrastructure projects in the US over the next four years.
A changing approach to equity sales
This tender offer is also notable for its revised rules, which allow both current and former employees to participate more equitably. OpenAI, criticised in the past for restricting former employees’ participation and penalising those who joined competitors, relaxed its policies earlier this year. The changes have made tender offers increasingly important in the tech sector, where fewer companies are going public and stock options often form a substantial portion of employee compensation.
Interestingly, questions remain over whether Anthropic’s leadership—many of whom are former OpenAI employees—will take part in this tender. Anthropic CEO Dario Amodei, president Daniela Amodei, and head of policy Jack Clark, all left OpenAI in 2021 to establish the rival AI firm, which recently raised $4 billion from Amazon. While Anthropic declined to comment, the situation highlights the interconnected and competitive nature of the AI industry.
Boon for OpenAI employees amid rapid AI growth
With a total of $2 billion in stock eligible for sale but SoftBank purchasing only $1.6 billion, some shares may remain unsold. Nevertheless, for those who qualify, the tender offer represents a remarkable financial boost, especially during the holiday season.
It’s another sign of OpenAI’s rapid rise as it solidifies its position as a major player in the AI landscape, while also offering employees a chance to share in its success.