OpenAI lets employees cash out $7 billion ahead of potential IPO
OpenAI has completed a deal to help employees sell roughly $7 billion in company shares ahead of a possible Wall Street debut, according to a
OpenAI has completed a deal to help employees sell roughly $7 billion in company shares ahead of a possible Wall Street debut, according to a person familiar with the matter. The ChatGPT maker bought back shares from current and former employees rather than tapping outside investors for the tender offer, said two people, who spoke on condition of anonymity as the information is not public. The deal valued the startup at $852 billion, the people said, unchanged from its most recent funding round. The move is significant as it comes before the company’s potential IPO and will ease some short-term cash pressure by allowing employees to sell part of their shares.
However, this is not something new. The AI companies periodically allow insiders to cash out some of their shares. OpenAI previously ran a $6.6 billion tender at a $500 billion valuation in October and an earlier $1.5 billion tender in 2024. Previously, OpenAI had requested investors such as Thrive Capital and SoftBank to buy shares from its employees. Also Read | Why OpenAI is slowing down the release its new Astra AI model? OpenAI declined to comment on the matter, Bloomberg says OpenAI delays IPO OpenAI’s rapid growth since ChatGPT’s 2022 launch has made it one of the world’s most valuable private AI companies.
It has also taken a step toward going public, confidentially filing IPO documents with the US Securities and Exchange Commission in June. However, some reports later suggested that the company may push the date back to 2027. According to PitchBook, OpenAI CFO Sarah Friar favoured waiting until 2027, while Altman was more inclined towards a September 2026 listing at a $1 trillion valuation. The research firm stated that market activity surrounding SpaceX's public debut raised concerns about investor reactions to a large-scale tech listing. As the company moves closer to its IPOs, investors are expected to scrutinise the issues SpaceX faces: whether massive capital expenditure can translate into sustainable profits and whether private-market valuations can continue to stand their ground under public-market scrutiny.
The AI developer raised $122 billion from Big Tech companies and venture capital firms in March. For much of this year, OpenAI has been locked in a fierce rivalry with Anthropic PBC. Once viewed as an underdog in the AI race, Anthropic has gained momentum for its AI software and vaulted ahead of OpenAI in valuation. Anthropic is also preparing for a potential IPO.
The BriefWire