According to the latest report from CNBC, on November 27, OpenAI allowed its employees to sell approximately $1.5 billion (around 108 billion RMB) worth of stock in a new tender offer proposed by SoftBank. This follows SoftBank Group (SBG) $500 million investment in OpenAI through its Vision Fund in October. Through this increased stake, SoftBank aims to further deepen its collaboration in the field of artificial intelligence (AI).
Details of the Tender Offer
OpenAI has permitted its employees to sell approximately $1.5 billion in shares through SoftBank Group public tender offer (TOB). The decision to participate now rests with OpenAI employees. OpenAI had long been considering providing employees with an opportunity to sell their company shares.
According to one source, employees must decide whether to participate in the previously unreported tender offer by December 24. The deal was driven by SoftBank founder and CEO Masayoshi Son. Commenting on OpenAI new AI model “OpenAI o1” released in September, Son stated that “AI has acquired the ability to think.”
The transaction was conducted through SoftBank Vision Fund 2, underscoring Son strong interest in the AI sector and his commitment to supporting the most valuable private enterprises. Each share is priced at $210, consistent with the company most recent funding round.
SoftBank Broader AI Ambitions
SoftBank is an early investor in semiconductor company Arm. At a conference in October, Son revealed he was preparing “tens of billions of dollars” to take “the next big step” in AI. He previously invested in Apple, Qualcomm, and Alibaba.
SoftBank Group is reportedly developing plans to design and manufacture AI semiconductors through its UK-based chip design subsidiary, ARM. Additionally, the group plans to expand its business into data centers, robotics, and power infrastructure. This strategic expansion is expected to help close the gap with OpenAI and facilitate the development of semiconductors that support the company most cutting-edge AI technologies.
SoftBank Vision Fund 2 has recently invested in AI startups including Glean, Perplexity, and Poolside.
OpenAI Financial Landscape
OpenAI fundraising has been ongoing, with its valuation climbing to $157 billion within two years of launching ChatGPT. The company has raised approximately $13 billion from Microsoft. In October, OpenAI completed its latest $6.6 billion funding round, led by Thrive Capital, with chip manufacturer Nvidia and SoftBank participating as follow-on investors.
OpenAI has also secured a $4 billion revolving credit facility, bringing its total liquidity to over $10 billion. A source confirmed that OpenAI expects revenue of $3.7 billion this year, with losses of approximately $5 billion.
Fierce Competition and the Need for Liquidity
The tender offer is open to current and former employees who received restricted stock units at least two years ago and have held those shares for at least two years. In a sluggish IPO market with soaring company valuations, tender offers are critical for tech employees. Private companies rely on such transactions to keep employees satisfied and alleviate pressure to go public.
Since OpenAI is unlikely to pursue an IPO in the near future and its valuation is too high for potential acquirers, secondary stock sales represent the only way for shareholders to realize some of their paper wealth in the foreseeable future.
Intensifying Competition in the AI Market
OpenAI faces increasingly fierce competition from startups like Anthropic and tech giants like Google. According to the latest data from Menlo Ventures, the generative AI market revenue is projected to exceed $1 trillion within a decade, with enterprise spending on generative AI surging 500% this year.
In October, OpenAI launched a search feature within its popular chatbot ChatGPT, enabling the powerful AI startup to better compete with search engines such as Google, Microsoft Bing, and Perplexity.
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