OpenAI CEO Sam Altman during an event in Seoul, South Korea, Friday, June 9, 2023.
Sung-jun Cho | Bloomberg | Getty Images
According to CNBC, OpenAI allowed employees to sell about $1.5 billion worth of stock in a new tender offer to SoftBank.
Two people familiar with the matter told CNBC that the new financing will give the Japanese technology group a larger stake in the artificial intelligence startup and allow current and former OpenAI employees to cash in their shares.
A person familiar with the matter said the new tender offer, which has not been previously reported, will close this week. The deal was driven by SoftBank billionaire founder and CEO Masayoshi Son, who insisted on getting more money at the startup after pouring $500 million into OpenAI’s last funding round, a person familiar with the matter said. Multiple shares.
One of the people said the tender offer is not related to OpenAI’s potential plan to restructure the company into a for-profit enterprise.
OpenAI and SoftBank declined to comment.
The news underscores Son’s interest in the field of artificial intelligence and backing the most valuable private companies. SoftBank is an early investor in Arm, Masayoshi Son explain At a recent conference, he was saving “tens of billions of dollars” to make the “next big move” in artificial intelligence. He has previously invested in Apple, Qualcomm and Alibaba.
SoftBank’s Vision Fund 2 recently invested in artificial intelligence startups Glean, Perplexity and Poolside. SoftBank’s two Vision Funds have about 470 portfolio companies and $160 billion in assets.
A person close to Son told CNBC that OpenAI’s investment matches SoftBank’s desire to deploy a cash- and capital-intensive business model.
Even without SoftBank’s deep pockets, OpenAI could easily raise billions in cash. In the two years since ChatGPT launched, its valuation has climbed to $157 billion. OpenAI has raised approximately $13 billion in funding Microsoftand completed the latest round of US$6.6 billion in financing in October, led by Thrive Capital, with chip manufacturers Nvidia, SoftBank and other companies also participating.
The company also secured a $4 billion revolving credit facility, bringing its total liquidity to more than $10 billion. CNBC confirmed to a person familiar with the matter in September that OpenAI expected revenue to reach $3.7 billion this year and a loss of about $5 billion.
OpenAI employees can cash out
The tender offer will be open to current and former employees who acquired restricted stock units at least two years ago and held the shares for at least that long, a person familiar with the matter said. The $210 unit price will be in line with the company’s most recent round of funding.
With the IPO market dormant and company valuations soaring, tender offers have become critical for tech employees. Private companies rely on such deals to keep employees happy and ease the pressure of listing on public markets. Since OpenAI won’t have an immediate IPO and the company is too expensive for potential acquirers, a secondary stock sale is the only way for shareholders to pocket some of their paper wealth in the near future.
Databricks is another private company raising capital to allow employees to cash out and avoid the pressure of public markets, according to CNBC Report this week.
OpenAI has taken a stricter approach to tender offers in the past, with rules allowing the company to decide who can participate in stock sales, CNBC reported in June. Current and former OpenAI employees have previously told CNBC that there are growing concerns about access to liquidity following reports that the company has the right to reclaim vested equity.
But the company reversed its policy on secondary stock sales this summer and now allows current and former employees to participate equally in the annual tender offer.
The company expects to allow more secondary sales and will need to tap the private market again in the future based on investor demand and the capital-intensive nature of the business, according to a person familiar with this week’s takeover bid.
OpenAI faces increasing competition from startups such as Anthropic and technology giants such as Google. The generative artificial intelligence market is Expected to exceed US$1 trillion According to the latest data from Menlo Ventures, revenue has grown significantly in a decade, and enterprise spending on generative AI has surged 500% this year.
Last month, OpenAI launched a search feature in its viral chatbot ChatGPT, allowing the powerful artificial intelligence startup to better interact with search engines such as GoogleMicrosoft’s Bing and Perplexity.
watch: Geoff Lewis of Bedrock Capital said that OpenAI is currently the authoritative consumer brand in the field of artificial intelligence
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