OpenAI let current and former employees cash out as much as $30 million each in shares last October, allowing more than 600 people to collectively pocket $6.6 billion in a single transaction, according to The Wall Street Journal (1). About 75 workers walked away with the full $30 million, the Journal reported, citing people familiar with the matter.
The sale cements OpenAI’s standing as one of the world’s most valuable startups — and it notably marks one of the largest concentrations of pre-IPO employee wealth ever created in Silicon Valley. OpenAI had tripled its previous per-employee cap of $10 million as the company said that old limit frustrated top researchers and engineers who were eligible to sell more, according to The Wall Street Journal.
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The deal also marked many staffers’ first real shot at liquidity, as OpenAI requires employees to hold their stock for two years before selling, a rule that locked out the wave of workers who joined after ChatGPT’s debut in late 2022.
OpenAI’s lucrative tender offers
For most of Silicon Valley’s history, it worked like this: You’d join a hot startup with hopes it would eventually go public, and that its stock would still hold value by the time vesting and lockup periods ended. But things have changed over the past two decades, especially after the dot-com era produced hundreds of IPOs that didn’t actually enrich employees who were locked into post-listing holding periods, meaning many watched their fortunes evaporate before they even had a chance to touch that money.
Today, we’re seeing a lot of private tech companies stay private far longer. In response, secondary share sales — commonly called tender offers (2), in which existing investors or the company itself buys back stock directly from employees — have become a welcome release valve for those workers sitting on wealth that is still not yet liquid. OpenAI has run several of them in recent years.
The October round was a standout. Employees who joined OpenAI when it created its for-profit subsidiary (3) in 2019 have seen the value of their stock grow more than 100-fold, per the WSJ. And the figures are even more extreme as you look higher up on the company ladder. Last week, OpenAI President Greg Brockman testified in court (4) that his equity stake is worth around $30 billion. CEO Sam Altman has said he doesn’t own shares in the company, citing its nonprofit origins — though some investors expect that to change (5) if Altman prevails in his ongoing court fight with Elon Musk over OpenAI’s restructuring into a for-profit entity.
