Early employees expected to become billionaires one after another after cashing out $210 per share
Softbank plans to expand its stake even after investing $500 million
Photo = AFP OpenAI, the developer of ChatGPT, allowed employees to sell about $1.5 billion (2.091 trillion won) worth of stock following an acquisition proposal by Japan’s Softbank Group. Accordingly, Softbank’s stake in Open AI, which invested $500 million in Open AI financing last October, is expected to increase significantly.
According to CNBC on the 27th (local time), OpenAI is allowing employees to sell partial shares to SoftBank, allowing current and former employees to cash out their shares at $210 per share, valued at $210 per share in the latest financing round.
Through this, Softbank is expected to increase its stake in Open AI, and Open AI’s early employees will be sitting on a cushion of money.
SoftBank founder and CEO Masayoshi Son has been pushing to increase his stake in OpenAI even after investing $500 million in the company’s most recent funding round.
One of the people said the offer would be open to current and former employees who were granted shares at least two years ago and held them during that period.
The price of $210 per share is based on OpenAI’s corporate value, which was valued at $157 billion in a funding round conducted last October. Employees have until December 24 to decide whether to participate in SoftBank’s offer.
The transaction was conducted through SoftBank’s Vision 2 Fund. Softbank has also invested early in ARM and said at a recent conference that it is raising hundreds of billions of dollars to fund the next big move in artificial intelligence (AI).
Softbank’s Vision Fund 2 also recently invested in AI startups Glynn, Perplexity, and Poolside. The two Vision Funds have assets of approximately $160 billion (223 trillion won) and are investing in about 470 companies.
A close associate of Chairman Masayoshi Son told CNBC that the investment in OpenAI is in line with SoftBank’s ambitions to invest cash through capital-intensive business models.
OpenAI is valued at $157 billion just two years after the launch of ChatGPT. After receiving approximately $13 billion in investment from Microsoft, the company raised $6.6 billion in investment in October of this year, led by Thrive Capital and with participation from Nvidia, Softbank, etc.
It is reported that OpenAI is expecting a loss of about $5 billion on sales of $3.7 billion this year.
The proposed acquisition is unrelated to OpenAI’s plans to restructure the company into a profitable business, it said.
With the IPO market slumping and company values soaring, stock acquisition offers are becoming a huge carrot for employees of technology companies. Private companies can rely on such deals to retain employees and reduce the pressure to list on the public markets.
Guest reporter Kim Jeong-ah kja@hankyung.com
