OpenAI buys back $7 billion of employee shares out of pocket, $852 billion valuation suggests IPO still in sight OpenAI completes an approximately $7 billion employee share buyback deal, providing employees at the world’s most high-profile AI startup with a massive cash-out channel

OpenAI buys back $7 billion of employee shares out of pocket, with $852 billion valuation suggesting IPO still on the horizon OpenAI completed an employee share buyback deal worth about $7 billion, giving employees at the world's most high-profile AI startup a massive avenue for cashing out. According to people familiar with the matter, the tender offer did not introduce external investors. Instead, OpenAI directly repurchased shares from current and former employees, which is a clear difference from the past practice of inviting investors such as Thrive Capital and SoftBank Group to participate in employee share purchases. The deal valued OpenAI at US$852 billion, which was the same as the valuation of its latest round of financing in March this year and did not form a new round of valuation jump. The buyback coincides with a critical juncture when OpenAI is paving the way for its IPO. In June, OpenAI confidentially filed documents with the U.S. Securities and Exchange Commission in preparation for a possible initial public offering later this year. However, the launch of this large-scale tender offer suggests that an IPO may not come soon. At a time when technology companies generally extend the privatization phase, tender offers have become an effective alternative for employees to cash in stock compensation and avoid the complexity of public listings. Under pressure on performance and approaching rivals, OpenAI chose this time to repurchase employee shares because of the dual pressures of performance and competition. In April this year, the Wall Street Journal reported that OpenAI failed to meet internal revenue and user targets. In July, CEO Altman also admitted on social platforms that "the past 12 months were not our best period," and attributed the responsibility to his own leadership. Companies going public usually need to show strong financial data to investors, and OpenAI has obviously not yet delivered a completely convincing report card in this dimension. Meanwhile, rival Anthropic was reported to have achieved profitability earlier this year, and its potential listing plans have further heightened the sense of urgency for OpenAI. Analysts believe that the much-anticipated IPO may wait for OpenAI’s new strategy—to reduce business investment and focus on enterprise services—to achieve results before it is officially launched. This US$7 billion repurchase is not only a bargaining chip for the retention of core talents, but also a signal to the outside world: OpenAI would rather fully accumulate strength in the private stage than rush to ring the listing bell with performance that does not meet expectations. via AI News (author: AI Base)