Billion-Dollar Mystery: Who’s Cashing Out at OpenAI?

In a significant financial move, OpenAI, the company behind the widely popular ChatGPT, has opened up a new avenue for its employees by allowing them to sell shares worth approximately $1.5 billion to SoftBank in a tender offer, as reported by CNBC. This initiative not only provides liquidity to current and former employees but also signals SoftBank’s deepened interest in AI, spearheaded by its billionaire CEO Masayoshi Son.

This transaction, facilitated through SoftBank’s Vision Fund 2, reflects a strategic maneuver by Son, who has been vocal about his ambitions to capitalize on AI’s potential. After already investing $500 million in OpenAI’s previous funding round, this deal marks another step in his quest to secure a larger stake in what he perceives as the future of technology. The deadline for employees to opt into this offer is set for December 24, providing a window for those with shares granted as restricted stock units at least two years ago to potentially cash out.

The move comes at a time when OpenAI has witnessed an unprecedented surge in valuation, reaching $157 billion just two years after launching ChatGPT. This growth trajectory has been supported by substantial investments, including roughly $13 billion from Microsoft (MSFT), and a recent $6.6 billion funding round in October that included participation from Thrive Capital, Nvidia (NVDA), and, of course, SoftBank. Moreover, a $4 billion revolving line of credit has boosted OpenAI’s liquidity to over $10 billion, despite projections of significant losses—about $5 billion—against $3.7 billion in revenue for the year.

This tender offer does not indicate a shift toward a for-profit model for OpenAI, despite what might be inferred from the financial restructuring, the publication notes. Instead, it’s a mechanism to reward and retain talent in a highly competitive tech landscape, where AI expertise is at a premium. The pricing of the shares at $210 per unit aligns with the company’s valuation from its latest funding round, ensuring that the deal reflects current market perceptions of OpenAI’s worth.

SoftBank’s involvement in this tender offer is part of a broader strategy to invest in AI, evidenced by recent stakes in startups like Glean, Perplexity, and Poolside through Vision Fund 2. With a portfolio of about 470 companies and assets over $160 billion across its vision funds, SoftBank continues to position itself as a major player in AI and technology at large, following previous successes with investments in companies like Apple (AAPL), Qualcomm (QCOM), and Alibaba (BABA).

This financial maneuver by OpenAI, with support from SoftBank, underscores the dynamic interplay between tech startups, their investors, and the broader market’s appetite for AI innovations. It also highlights the strategic decisions companies must make to balance growth, employee satisfaction, and investment opportunities in an industry where the next big technological leap could redefine market leaders.

Reference: CNBC

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